The recent 2% Federal Deficit Levy has paved the way for a further increase in the rate of Fringe Benefits Tax from 47% to 49% from 1st April 2015. As a result, the “gross up” rates will increase as follows:
- Type 1 benefits 2.1463 (up from 2.0802)
- Type 2 benefits 1.9608 (up from 1.8868)
Tax-paying employers will be required to pay the extra tax, so now is a good time to review salary packaging agreements to ensure that the increase in the rate of FBT is factored into the package.
In order to maintain the current cash value of benefits received by employees of various tax-exempt entities, the grossed up annual caps have been increased as follows:
- $31,177 (currently $30,000) per employee for
PBI’s, which equates to a Type 1 cash benefit of
- $17,667 (currently $ 17,000) per employee for
public and not-for-profit hospitals, which equates
to a Type 1 cash benefit of $8,231.
Your RDL advisor can help you sort through your salary packaging arrangements to ensure you are getting the maximum benefit.