how to calculate fringe benefit tax

Assume you offer health insurance, sick days, and athletic facilities. Meals are exempt only if they are furnished on the business's premises for your convenience. Identifying Fringe Benefits. If you add your annual salary to your annual fringe benefit value, you can see you are compensated annually in the amount of $50,160 ($41,600 + $8,560). We use cookies to make wikiHow great. Examples of fringe benefits include: Although fringe benefits are typically taxable, some are nontaxable. In just a few tenths of a second, you will see: The numbers just appear and you have all the information you need. This article has been viewed 96,739 times. The number of employees that are doing prevailing wage work. Find out what you need to know on this page, and test yourself with our quiz. = $100,000 Step 2: Fringe Benefit Tax Payable = Fringe Benefit Tax Rate * Fringe Benefit Tax Taxable Amount Moving expenses are exempt only if you would be able to deduct them had you paid for them. © Australian Taxation Office for the Commonwealth of Australia. For example, if you make $20 per hour and work 40 hours per week, your annual salary equals $41,600 (40 hours per week x 52 weeks in a year x hourly wage). Currently the fringe benefits tax is calculated dependent on the amount of kilometres you do in your car throughout the year. Find out in just a few seconds, with our FREE financial calculator whether you’re really getting your time’s worth at your present job or you feel like you might want to accept that new job that was offered to you. Although rates vary, according to the Bureau of Labor Statistics, the average fringe benefit rate (aka benefit costs) is 30%. Say you have a full-time hourly employee who gets paid $25 per hour. For example, your employment contract may state your employer will pay for health insurance. These rules … For example, assume you receive three fringe benefits as a part of your employment. Take wikiHow’s Wine Course and drink wine like an expert. If your employer states you will have access to a company car, this would be a fringe benefit as well. Keep in mind that some fringe benefits are only nontaxable in certain situations. Work out the grossed-up taxable value by multiplying the total taxable value of all the fringe benefits you can't claim a GST credit for (from step 4) by the type 2 gross up rate. For example, companies that provide health insurance can ensure their workforce stays healthy so they can come to work and be productive. Step 7 Fringe Benefit Tax (FBT) is tax paid on the taxable values of fringe benefits being provided by an employer to an employee. The fringe benefit portion in dollars of the work per hour. Independent contractors and business partners can also receive fringe benefits (not taxed). ($30,000 x 20%) – $2000 = $4,000. In another example, assume you are paid $20 per hour and you work 40 hours per week. Include your email address to get a message when this question is answered. Have you ever wondered what the real value of your work is? The fringe rate shows you how much an employee actually costs your business beyond their base wages. Gain valuable insights with real-time statistics and analytics for your calculator. Also check out our other free online math calculators for your mathematical needs. {"smallUrl":"https:\/\/www.wikihow.com\/images\/thumb\/a\/a4\/Calculate-Fringe-Benefits-Step-1-Version-4.jpg\/v4-460px-Calculate-Fringe-Benefits-Step-1-Version-4.jpg","bigUrl":"\/images\/thumb\/a\/a4\/Calculate-Fringe-Benefits-Step-1-Version-4.jpg\/aid1431362-v4-728px-Calculate-Fringe-Benefits-Step-1-Version-4.jpg","smallWidth":460,"smallHeight":345,"bigWidth":"728","bigHeight":"546","licensing":"