Financial Services

Property Fringe Benefits Tax (FBT) Policy

Further information

Overarching Fringe Benefit Tax Policy

A property fringe benefit arises when an employee is provided with property, free or at a discount, by the University.

  1. Policy statement
  2. Calculation of property fringe benefits taxable value
  3. Long service/awards
  4. Gross up factors

Policy statement

Goods supplied to an employee on a working day, which are consumed on University premises are exempt property fringe benefits. For example, orange juice and sandwiches consumed by employees on University premises on a working day are exempt from FBT.

Stationery and consumables supplied to employees in carrying out their University duties are exempt from FBT.

Where the University provides property to an employee and the business carried on by the University includes the provision of identical or similar property principally to outsiders it will be an in-house property fringe benefit.

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Calculation of property fringe benefits taxable value

The taxable value of a property fringe benefit is generally the arm's length cost of the property to the University less any amount contributed by the employee. Where the property is an in-house fringe benefit the taxable value may be reduced depending on whether the property is purchased or manufactured by the University.

Otherwise Deductible Rule: Where an employee could have obtained an income tax deduction for the property fringe benefit, then the taxable value of the benefit is reduced by the amount of that deduction.

This must be supported by one of the following declarations prior to lodgement of the FBT return:

  • No private usage declaration: where an employee is provided with property used solely for employment-related purposes
  • General declaration: required in circumstances where the property is partially used for some tax deductible purposes
  • Recurring declaration: it is an identical property benefit over a number of years. This declaration may apply to cover benefits received over a five-year period as long as the tax deductible percentage does not vary from year to year by more than 10 per cent.

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Long service/awards

  • Long service awards granted by the University in recognition of 15 years by an employee are exempt from FBT provided the value of the award does not exceed $1000.
  • The $1000 limit increases by $100 for each additional year of service by the employee in excess of 15 years, effective from 1/4/05.
  • If a University employee has previously received a long service award from the University under the above mentioned criteria, then any further similar award is limited to an amount of $100 for each subsequent year of service.
  • Prior to 1 April 2005, the limit was $500 increased by $50 for each additional year of service by the employee in excess of 15 years.

Should the value of a long service award exceed the specified maximum amount, no part of the award is exempt.

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Gross up factors

Due to the introduction of GST it will be essential to determine which gross up factor will apply to property fringe benefits. The Calculating the grossed-up taxable Value table which will assist in determining which gross up factor applies:

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