Estimating payroll tax on fringe benefits
You can use estimated fringe benefits tax (FBT) figures for payroll tax if:
- the estimate is based on the previous year's fringe benefits taxable amounts
- you have been liable for FBT for 15 months.
You then adjust this against the actual FBT amount in your annual return.
As the FBT year ends on 31 March and the payroll tax year ends on 30 June, you will need to reconcile the fringe benefit values for April, May and June in the following financial year's payroll tax annual return.
An employer used estimated fringe benefit figures to work out its payroll tax each month from July 2018 to June 2019.
The estimated figure of $3,000 per month was 1/12 of the total FBT taxable amount of $36,000 for the previous FBT year ending 31 March 2018. The FBT taxable amount is based on a Type 2 gross-up factor from that FBT year.
In July 2019, the employer must:
- include the FBT taxable amount of Queensland fringe benefits for the year ending 31 March 2019 ($50,000, which is greater than the estimated amount) in its annual return
- calculate payroll tax with the $50,000 included as taxable wages
- pay any tax shortfall for the year when lodging the annual return.
If you use actual figures in your periodic returns throughout the year, the FBT amounts should already match. You only reconcile when you use estimated figures for all or part of a financial year.
Note: From 1 April 2020, the Type 2 gross-up rate is 1.8868. Consider this when using previous year FBT amounts as estimates.