Where the employer provides employee benefits (i.e. income other than normal wages) for employees, joint-stock employees, or persons associated with their company’s business, then the employer must pay the corresponding fringe benefit tax basis on this benefit value.
When you pay for FBT, there are several main categories：
These benefits can cover the following four main categories:
- Employer contributions to employee funds.
If the employer provides employees with benefit funds, insurance, you may have to pay fringe benefit tax. For example, premiums for life or health insurance.
- Employer provided goods and services.
If the employer provides subsidized or discounted goods and services to employees, you may have to pay fringe benefit tax. For example, subsidized transport.
- Employer provided low-interest loans.
If the interest rate provided by the employer to the employee is lower than the interest rate provided by the public, you may have to pay fringe benefit tax. For example, interest rates are lower than banks.
- Employer provided motor vehicles for private use. (This is the most common categoryin a company.)
For example, if you are a self-employed person or a partnership, the vehicle is your own or your partner’s private use, in which case you do not have to pay the employee welfare tax. But if it is a corporate form of business, the vehicle is for private use by the employee’s shareholders, tax is payable. Any organizational structure of the business, if the vehicle is provided to employees for private use, is required to pay fringe benefit tax.
When you pay FBT, there are different rates：
There are 3 different fringe benefit tax rates. You should choose the one that best suits your business.
| Name | Rates | Requirement |
| Single rate | 49.25% | Employees earn less than $70,000 per year. |
| Short form alternate rate | 49.25% for non-attributed benefits provided to major shareholder employees, and 42.86% for other non-attributed benefits | Employees earning less than $70,000.
Provide non-attributed benefits. |
| Full alternate rate | between 11.73% and 49.25% | Only applied to attributed benefits. |
When you pay FBT, you may encounter problems：
- Unable to distinguish FBT items accurately. Cannot clearly determine the classification of items, not sure whether to pay taxes.
- Not sure specific tax rates of FBT.
- Missed the payment date of FBT.
- Missed the filing due date of FBT return.
Why choose us?
We will be responsible for you and remind you to pay FBT in advance. Avoid forgetting to file and pay FBT. We have a professional team responsible for the FBT part, they will accurately distinguish whether each project belongs to FBT. And we will accurately calculate the tax to be paid, even if multiple tax rates are involved.
We have extensive experience and can provide high quality service. Reach out to us today for a quote and to see how we can help you!
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