End of FBT Year
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Salary Packaging Benefits for the End of FBT Year
With the end of the FBT (Fringe Benefits Tax) year fast approaching, it’s important to make the most of the tax savings available through your packaged benefits. You may have already received communication from us outlining the steps you need to take to maximise your tax savings this FBT year.
We want to ensure that you’re well-prepared, so if you missed our last email, here’s some information to help you with this process:
Friday March 31 2023, is the last day to spend funds on your Beyond Bank Benefit Card(s). Please ensure that you try to use up your remaining balance before this date. It is important to keep in mind that some vendors and financial institutions may take several days to process transactions, so it is recommended that you plan your spending accordingly.
Please note that any delays in transaction processing by vendors or financial institutions are not the responsibility of SalaryMasters.
Changes / Amendments…
If you need to make changes or amendments to your contributions for February or March, you must do so before the payroll cut-off period of the scheduled pay date in question.
If you are unsure, you can clarify cut-off periods for changes with your payroll team or with our customer service team on 1300 303 357.
We must receive any final claims for Venue Hire, Accommodation and Meal Entertainment by your final salary packaging pay deduction in March to ensure they are part of your 2022/23 Fringe Benefits Tax (FBT) year spend. (Note: cut-off period information above).
How does the End of the FBT Year affect me if I am salary packaging?
If you haven’t already, it’s important to try and spend all your available Meal Entertainment and Living Expenses Beyond Bank benefit card funds before 31st of March 2023.
If you do not have a zero balance by 31st March, the available balance will roll over to the new FBT year and the amount you can salary package in the new FBT year 2023/24 will be reduced by the balance remaining on the card.
How do I avoid reducing the amount that I can package in the new FBT year?
To maximise your tax savings and get the most out of salary packaging in the new FBT year, we encourage you to spend all your available funds on your salary packaging living expenses and meal entertainment cards before the 31st of March.
Please note that your transactions may take a few days to process by the merchant and remain in a pending state. As a result, we highly recommend that you spend card funds well before the 31st of March and don’t leave your spending until the last minute.
If your last pay date in the current FBT year is between 27th – 31st March, you may wish to stop any final payments to your benefit cards altogether and allow yourself more time to spend the balance. Please contact us as soon as possible if you wish to do this, noting that most payroll have a cut-off period prior to the pay date.
How do I spend my remaining balance quickly?
Here are some handy tips for reducing your balance:
Living Expenses cards – did you know that you can use your Beyond Bank card to purchase Pre-Paid Visa or Mastercard gift cards? This is a great way to zero out your benefit card for FBT purposes, but still have the funds on hand to spend when you are ready to.
Meals and Entertainment cards – another alternative is to use your Beyond Bank card to pre-book accommodation, or perhaps purchase restaurant vouchers to be used at a later date.
Is there anything I cannot buy with my Meal Entertainment funds?
Meal Entertainment cannot be used for purchasing the following items:
• Meals or drinks from venues on-site (at your workplace).
• Alcohol, unless it is consumed when dining out with friends or family groceries.
• Airline or theatre tickets
• Takeaway and home delivered meals.
What if I don’t spend or claim my full Salary Packaging or Meal Entertainment limit within the FBT year?
If you don’t claim your full salary packaging limit before midnight 31 March 2023, you will not lose this money. The balance will stay on your account for you to use in the new FBT year, which begins on Friday 1 April 2023. However, these funds will form part of your new cap, which means you may lose the potential tax savings on the cap limit you have not used from the previous FBT year.
For example, if you have $200 unspent from the 2022/23 FBT year, the maximum new deductions for capped benefits for the 2023/24 year will be $15,699 rather than $15,899.
When will I have my final Beyond Bank card payment?
Remember payments to Beyond Bank card(s) for many will stop one pay early each FBT year – this applies for those who have organised this arrangement through their payroll team. To provide you with extra time to spend your remaining balance before the end of the FBT year, your annual budget is spread over one less pay each FBT year, so no payment will be made from your last pay in March.
How do I check my card balance?
If you would like to confirm your current balance(s), please call the Beyond Bank 24/7 automated account information line on 13 14 02. All you need is your Beyond Bank member number and the telephone banking passcode.
Alternatively, you can access this information via an ATM, through your internet banking, or by using the Beyond Bank phone app, if you have linked your cards to your online account. To access your details via your Beyond Bank login click here.
If you would like to stop your final payment onto your cards altogether, particularly if your pay date is between 27th – 31st March, please contact us as soon as possible.
Novated Leasing for the End of FBT Year
As the FBT year draws to a close, it’s crucial to ensure that you maximise the benefits of your novated lease before 31 March.
What is the Fringe Benefit Tax (FBT) year and how does it impact my novated lease?
The FBT year is a period from 1st April to 31st March, during which the Australian Taxation Office (ATO) requires you to pay a certain amount of Fringe Benefit Tax (FBT) on your novated lease. The amount of FBT is determined by the taxable value associated with your vehicle and must be collected or offset within this period. To offset the FBT, an annual amount of post-tax equivalent to the taxable value of your vehicle is deducted from your pay using the Employee Contribution Method (ECM).
Collecting your annual amount of Employee Contribution Method (ECM or post-tax):
The Employee Contribution Method (ECM) is used by your employer to manage post-tax contributions in order to reduce the taxable value of your novated lease to zero. By contributing post-tax funds, you can offset the obligation to pay any Fringe Benefits Tax (FBT). In some cases, your employer may collect either too much post-tax (ECM excess) or not enough, resulting in a shortfall. The most common cause of a shortfall is setting up a new vehicle late in the FBT year when there are no remaining pay cycles to collect the necessary post-tax. If the shortfall is not addressed before the end of the FBT year, it will become an FBT liability for your employer that you will be required to pay. This is usually resolved with a small adjustment in the following FBT year to recover the outstanding amount.
Why do my deductions differ from my vehicle calculation?
During this time of year, it’s a frequently asked question why the payroll contribution amount varies from the original calculation. The explanation for this is that every time an estimate is provided, it is based on the remaining pay cycles within the current FBT year (which concludes on 31st March) to calculate the figures. As the FBT year draws to a close, the count of remaining pay cycles reduces, leading to a possible disparity between the estimated amount and the actual contribution amount. Therefore, it is crucial to keep track of the estimates and adjust them to ensure that the final contribution amount aligns as closely as possible with the initial estimate. As you enter a full FBT year, deductions will match or be very close to original calculation, there may be slight variation due to leap years or 27 pay cycles for the year.
If I am required to contribute to FBT, how does this get to the ATO?
As an employee with a novated lease, it’s important to understand that your employer is required to submit an FBT Return to the Australian Taxation Office (ATO) annually. Depending on your employer’s history and size, they may need to transfer the FBT amounts to the ATO monthly or quarterly, or they may hold the funds until the annual tax return is due. We work with some employers to assist with this process, depending on their specific requirements.
Rest assured that any FBT deducted from your salary is held securely until it’s time for payment to the ATO. This is similar to the PAYG income tax deductions that you may already be familiar with. If you have any questions or concerns about the process, we’re here to help.
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