Fringe Benefit tax
Fringe benefit is a non-cash benefit provided to an employee by an employer. Also, if an employer enters into an arrangement under which a third person provides a benefit to an employee, the benefit is subject to FBT (CX2).
FBT was introduced in 1985 and was to encourage employers to pay remuneration in cash rather than in benefits. The reason why employers are taxed rather than employees is for administration purposes, it is far easier to tax one employer rather than several employees. The employer files the FBT return and pays the FBT.
If you provide non-cash benefit to your employees you must register to file fringe benefit tax return, for small business owners there is an option to file and pay tax on anuual basis. If the benefit amount is paid back to the company then the there is no need to register and pay FBT.