Fringe Benefits on Payment Summaries

Fringe Benefits on Payment Summaries

The value of Fringe Benefits given to an employee, will need to be recorded on Payment Summaries in future years.

However there are different reporting years for Payment Summaries (from 1 July to 30 June) and for Fringe Benefits (from 1 April to 31 March). To get round this, the ATO has announced that the GC for the year ending 30 June in year XXXX, will show Fringe Benefits for the 12 months ending 31 March XXXX.

The Reportable Fringe Benefits are printed on Payment Summaries. This is for any employee, who received more than $1000 in Actual Fringe Benefits in the year ending 31 March. Refer to manual page 59-60.

If you do pay Fringe Benefits, you will continue to do your payments and reporting using whatever means you currently use. The recording onto Payment Summaries is an extra responsibility. You will not have to show the value of the Fringe Benefits to an employee, if it is not in excess of $1000.

In the employee’s Tax Screen, you can enter either the Reportable or the Actual value, and the other value will be calculated, using the factor. The factor was 1.9417 for all years up to and including 30 June 2006. Because the top marginal tax rate has reduced from 48.5% to 46.5% on 1 July 2006, the factor will change to 1.86916 for the Fringe Benefits year ending 31 March 2007, corresponding to the Payment Summaries for the Financial Year ending 30 June 2007.

Technical Note. Please note that 1.9417 is the correct factor, when calculating an employee’s Reportable FB. When doing their tax reporting, companies may use two factors 1.9417 and 2.1292. For FB’s which include GST, the employer could claim the GST, so the higher factor 2.1292 must be used so that there will be the same net effect as if the fringe benefit did not include GST. However the employee cannot claim the GST, so the factor 1.9417 must be used for reporting on Payment Summaries. If you need to discuss this further, please contact your accountant or the ATO.