Question 1

What is the FBT rate in Australia?

Accepted Answer

The FBT rate is 47%, which equals the top marginal income tax rate of 45% plus the 2% Medicare levy. FBT is paid by the employer on the grossed-up taxable value of fringe benefits provided to employees.

Question 2

How is car FBT calculated?

Accepted Answer

Under the statutory method, car FBT is calculated as 20% of the car's base value, grossed-up and taxed at 47%. For a $50,000 car, the taxable value is $10,000, grossed-up to $18,868, and FBT is approximately $8,868 per year.

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