As the Fringe Benefits Tax ("FBT")
year end approaches, some subtle legislative changes are
changing employee benefits practices.
In-House Benefits
From 1 April 2007, the FBT in-house reduction increased from
$500 to $1,000. As a result many employers now encourage
employees to salary sacrifice up to $1,000 of in-house property
and residual benefits. The potential savings include; input tax
credits, payroll tax, workers compensation and PAYG.
Employee Contributions
The individual highest marginal tax threshold has increased
threefold over the past seven years to $150,000. As a result
many employers and employees are frustrated with their legacy
motor vehicle policies and novated lease arrangements that give
rise to a FBT liability, yet only delivers marginal benefit to
middle income earners. Many employers would like to unravel the
existing arrangements.
