Record Fringe Benefits Tax – Wiise AU.

Why record FBT? 

You must keep a record that shows how you calculate the taxable value of benefits that support any Fringe benefits tax (FBT) exemptions or concessions you use for your business.  

How to record FBT? 

1. Register for FBT in Australia: If you must pay fringe benefits tax (FBT), register for FBT. 
2. Record keeping for FBT: Check with ATO which records you’d need to keep for FBT and how long to keep them.  
   
   Note: Determine which benefits provided to employees are subject to FBT. Common examples include car fringe benefits, meal entertainment and expense payments.
   
   Note: You must keep records that show how you calculated the taxable value of benefits and support any FBT exemptions or concessions you used. Examples of these records include calculations, worksheets, employee declarations, invoices, and others.
   
   Note: For entertainment-related benefits, work out if FBT applies to food, drink or recreation, or any associated travel or accommodation. 
3. Set Up FBT Accounts in Wiise: Ensure that you have the FBT expense and FBT payable accounts set up in your Wiise chart of accounts. If necessary, assign the FBT expense and payable accounts as default accounts for relevant transactions. 
   1.  If the FBT expense and FBT payable accounts are not in your current Wiise chart of accounts, create a new account to the chart of accounts for recording FBT expenses and set this account type to an expense account. Create a new account for recording FBT liabilities and set the account type to a liability account. 
4. Record FBT Transactions: When you provide fringe benefits to employees, create a purchase or expense transaction to record the cost of the benefit. Use the FBT expense account and FBT payable account to categorise these transactions. 
5. Calculate FBT Liability: Use the FBT rules and rates to calculate the FBT liability for each fringe benefit provided. 
6. Record FBT Payable: Create a journal entry to record the FBT liability in the FBT payable account. Debit the FBT expense account and credit the FBT payable account to recognise the amount owed to the ATO. 
7. Lodge your FBT return: Complete the necessary FBT return and lodge it with the ATO by the due date. You can lodge the FBT return through your tax agent or post a paper FBT return to ATO. 
8. Pay FBT: If you have FBT payments, you may need to pay in quarterly installments. Pay the FBT liability to the tax authority by the due date. Record the payment in your general ledger to update the FBT payable account. Debit the liability account FBT payable to reduce the amount owed and credit your bank account or cash account to reflect the payment.  
9. Reconciliation: Regularly reconcile FBT transactions and payments to ensure accuracy in your records. 
10. Account for FBT in Financial Statements: Include the FBT expense in your financial statements. You may disclose this as a separate line item in the income statement or as a note to the financial statements 
11. You've completed recording FBT for Wiise AU. 

What’s next? 

Your business may be entitled GST credits for acquisitions made to provide FBT or GST on employee contributions if you are registered or required to be registered for GST. Find out how to set up GST and BAS for your business.  

Need more help?   

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