FBT Guide — Fringe Benefit Tax on Employer-Provided Benefits in NZ
the Fringe Benefit Tax (FBT) in New Zealand. The guide covers the FBT on the employer-provided vehicles, the low-interest loans, the subsidised transport, the medical insurance, and the other non-cash benefits provided to the employees.
FBT Overview
The Fringe Benefit Tax (FBT) is the tax paid by the employers on the non-cash benefits provided to the employees. The FBT rate is 49.25% (for the "single rate" option) or the "multi-rate" option (11.64% to 63.93% depending on the employee's income). The common fringe benefits include: (a) the motor vehicles available for the private use (the "private use" of the employer-provided vehicle), (b) the low-interest loans (the loans at the rate below the IRD prescribed rate), (c) the subsidised transport (the free or the subsidised transport for the employees), (d) the medical insurance (the employer-paid premiums), and (e) the other non-cash benefits (the accommodation, the goods, the services).
FBT Returns
The employer must file the FBT return (the IR420 or the IR422) by the 31st of May for the annual return (the "March quarter" balance date) or by the 20th of the month following each quarter. The FBT return shows the total value of the fringe benefits provided and the FBT payable. The small employers (the FBT of less than $500 per quarter) can file the annual return. The FBT can be reduced if the employee reimburses the employer for the private use of the benefit (the "employee contribution").