Premier & Cabinet

Type:
Department of Premier and Cabinet Circular
Identifier:
C2006-18
Status:
Archived

C2006-18 Reduction in the Rate of Fringe Benefits Tax

Description

The 2006-2007 Federal Budget reduced the rate of Fringe Benefits Tax (FBT) from 48.5% to 46.5%, effective from 1 April 2006.

Detailed Outline

The 2006-2007 Federal Budget reduced the rate of Fringe Benefits Tax (FBT) from 48.5% to 46.5%, effective from 1 April 2006.

The SES Guidelines provide that where applicable, the cost of FBT must be included in the remuneration cost of benefits provided as part of an SES officer's Total Remuneration Package (TRP).

For the purposes of charging the officer's TRP, FBT should now be calculated as 46.5% of the value of the benefit grossed up by 1.8691* (i.e. benefit x 1.8691 x 0.465). The FBT year is from April 1 to March 31.

Below is an example of how to calculate the FBT for an SES/Senior Officer salary packaged motor vehicle using the statutory formula method in accordance with the SES Guidelines. Note that the following calculations apply to both StateFleet and novated lease packaged vehicles.

Capital cost of the car (GST inclusive) - $35,000.00
Estimated annual km - 25,000 km
Statutory fraction will be - 0.11 (as per Circular No. 95-10)

New FBT = Capital cost x statutory fraction x gross up value x FBT rate
= $35,000.00 x 0.11 x 1.8691 x 0.465
 = $3,346.16

The SES Guidelines will be amended to reflect this change.

*Gross up value is 1/1 - FBT rate = 1/1 - 0.465 = 1.8691

C Gellatly
Director-General

Issued : Workforce Capability (Public Employment Office)
File no: PSM/00094
Date: 1 June 2006

Overview

Compliance

Not Mandatory

AR Details

Date Issued
Jun 1, 2006
Review Date
Dec 31, 2014
Replaces
Replaced By

Contacts

Contact
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Phone
02 9228 5555
Publishing Entity
Department of Premier and Cabinet
Issuing Entity
Department of Premier and Cabinet