When a transaction attracts a fringe benefits the amount paid for the benefit does not relate directly to the transaction. The amount of the fringe benefit and the FBT as a result is calcuated as a separate entry.
This is because the benefit is the total amounts (not the tax liability) and the benefit has different classification (T1 and T2) depending upon whether it has GST on the amount paid and liability is based on the tax rate applicable to the employee.
The difference between FBT - Reportable Taxable and FBT - Reportable Exempt depends upon the total benefit received by the employee. A tax agent will need to provide the FBT to be reported.
Accounting for FBT
These are the steps to enter the FBT reported on the payment summary and submit the amount to the ATO:
1. Create an FBT liability account
2. Set the account Payroll options
3. Enter a journal in the current financial year
The net effect of this journal is zero, but the debit side of the journal is allocated to the employee.
FBT is reported for individual employees as part of the STP submission.
- The FBT period is from April to March (but this doesn't effect the journal entry that you create to report the employee fringe benefits)
- The journals recognising the FBT liability are not entered into a batch but there must be an STP submission. The STP submission will pick up all Year To Date figures including the about batch. If you don't have any STP events to be submitted, then enter a "Catch All" STP event.
- Remitting a payment for FBT to the ATO will be recorded as a separate payment to an expense account (FBT Expense).