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      Record Fringe Benefits Tax – Wiise NZ

      Overview:  

      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? 

      MyIR is New Zealand Inland Revenue secure online services facility. You can use myIR to deal with New Zealand Inland Revenue online.  You can use it to check whether you're due a tax refund or have tax to pay. You can find more information from the Inland Revenue Department (IRD) website too.  

      1. Register for FBT in NZ: If you must pay fringe benefits tax (FBT) when you start providing a fringe benefit to your employees, you’ll need to register for FBT on myIR. 
      2. Record keeping for FBT: Check with the Inland Revenue Department 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. Make use of the calculator and tools available on IRD. 

      Note: For entertainment-related benefits, work out if FBT applies to food, drink or recreation, or any associated travel or accommodation. 

      1. Calculate FBT Liability: Calculate the FBT liability using the relevant rates and rules provided by Inland Revenue. FBT is generally calculated based on the taxable value of the fringe benefits provided.
      2. Record FBT in the general ledger: Create a journal entry to record the FBT liability in the general ledger. Debit an expense account ("FBT Expense") for the FBT amount and credit a liability account ("FBT Payable") to recognize the amount owed to the IRD. Or you can recognise both FBT transaction types directly on your FBT accrued account.
      3. Pay FBT: When it's time to pay the FBT liability to the IRD, record the payment in your general ledger. Debit the liability account "FBT Payable" to reduce the amount owed and credit your bank account or cash account to reflect the payment. 
      4. Report FBT to Inland Revenue: Complete the necessary FBT return and file it with IRD by the due date. Ensure that the information provided is accurate and matches the records in your general ledger. 
      5. Reconciliation: Regularly reconcile FBT transactions and payments to ensure accuracy in your records. 
      6. Account for FBT in financial statements: Include the FBT expense in your financial statements. It is typically disclosed as a separate line item in the income statement or as a note to the financial statements. 
      7. You've completed the FBT process for Wiise in NZ. 

        Note: For more information regarding FBT check go to the New Zealand Inland Revenue Department website.   

         

        What’s next? 

        You can lodge the FBT return either through myIR or file a paper return and post it to IRD. As a business you may be subject to filing quarterly returns. Find out how to fill in the FBT quarterly form for NZ. 

         

        Need more help?   

        No problem, that's what we're here for. Reach out to support@wiise.com anytime you can't find what you're looking for.