Should a rebatable employer be adding FBT liability for salary packaging to their employee’s pre-tax section of their payslip? Or is it a post-tax deduction instead?
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Howdy @dennich,
For rebatable employers. The Fringe Benefits Tax (FBT) liability related to salary packaging is a post-tax deduction.
This means that the FBT liability is:
- not added to the pre-tax section of the employee’s payslip
- but is instead managed through post-tax contributions.
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Howdy @dennich,
For rebatable employers. The Fringe Benefits Tax (FBT) liability related to salary packaging is a post-tax deduction.
This means that the FBT liability is:
- not added to the pre-tax section of the employee’s payslip
- but is instead managed through post-tax contributions.
Thank you for the response @Matt_ATO
The reason I ask is that salary packaging service providers like AccessPay show that the FBT payable is pre-tax in their online calculator. This is the same for SalaryPackagingPLUS's calculator. So essentiall both these providers are mis-leading the actual benefit of these arrangements.
Further, if I re-calculate for FY24 a salary of $140,000 with pre-tax expense of $15,900 and FBT payable of $7,473. Their calculators identify a $1,490.68 benefit if FBT liable is pre-tax. But it should be post-tax which results in a $1,272 loss.
Therefore, not only are they mis-leading but also Salary Packaging for a Rebatable employer costs employees not benefits them?
Would be good to know if these points are accurate?
Thanks,
Christian
Hi @dennich
Oh no. I can see things are getting a little tricky here. Usually, a reportable fringe benefit will be prefilled in the Income test section of an employee's tax return.
Sometimes an employer may ask an employee to contribute to the FBT liability. This is fine to do.
But we don't provide any advice when entering a salary sacrifice arrangement or any specialised financial advice for your situation.
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