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KathC(Newbie)Newbie
20 Feb 2026

I'm in dispute with our salary packaging provider over the timing of a fringe benefit recognition. We will process a payroll on the 31st of March, which will be the 27th payrun in the current FBT year for us. Our packaging provider will transfer funds to staff on the 1st of April.

I think the benefit, being the tax reduction, happens and should be recognised when the payrun is processed and filed to ATO on March 31. Our provider thinks it gets recognised on April 1.

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3 replies
130 views
3 replies

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TaxTalk1234(Dynamo)Dynamo
21 Feb 2026

Under the FBTAA, a fringe benefit arises when the benefit is "provided". For a fringe benefit, notwithstanding that the employee probably entered into the arrangement for the purpose of saving tax, the benefit isn't actually the tax saving, the benefit is the "thing" that is provided to the employee (the car, mobile phone, LAFHA etc....). What is the specific benefit you are meaning in this situation?

RachelATO(Community Moderator)Community Moderator
23 Feb 2026

Hi @KathC,


The timing of when a fringe benefit is recognised depends on when the benefit is actually provided to the employee, not when the payroll is processed or when you file information to us. For fringe benefits tax purposes, the FBT year runs from 1 April to 31 March. The timing of the benefit is when it's given to the employee.


In your situation, if the salary packaging funds are transferred to staff on 1 April, the benefit would be recognised in the new FBT year starting 1 April, not in the FBT year ending 31 March. Because this is when the employee receives or has access to it.


Even though you're processing the payroll on 31 March, if the actual transfer of funds to staff happens on 1 April, that's when the fringe benefit is provided and should be counted.


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When is a fringe benefit recognised? | ATO Community