Basically, a fringe benefit is a benefit provided to an employee (or their associate) because that person is an employee. Benefits can be provided by an employer, an associate of the employer or by a third party under an arrangement with the employer. An employee can be a current, future or former employee.

You may be providing a fringe benefit when you do any of the following:
n allow an employee to use a work car for private purposes
n give an employee a low-interest loan
n pay an employee’s private health insurance costs
n provide cleaning services for an employee’s private residence
n reimburse an expense your employee has incurred
n provide entertainment by way of food, drink or recreation to employees.
If you operate your business as a company or trust, it’s likely you are an employee of that business.
Work-related items exempt from FBT
An FBT exemption applies for the following work-related items purchased after 7.30pm on 13 May 2008:
n a portable electronic device
n an item of computer software
n an item of protective clothing
n a briefcase
n a tool of trade.The exemption is limited to:
n items mainly used for work-related purposes
n one item per FBT year for items that have a substantially identical function, unless the item is a replacement item.

Who pays FBT?
As an employer, you have to pay FBT, even if the benefit is provided by an associate or by a third party under an arrangement with you. For example, you may deal with a supplier who provides free goods to your employees.