Small businesses can achieve real dollar savings by efficiently managing and calculating the Fringe Benefits Tax on meals and entertainment. However, the challenge is often finding the best calculation. Many organisations struggle to identify which calculation method is best for them and, as a result, have to pay more FBT than necessary.
Here are five FBT strategies that may help small businesses get ahead:
1. Automate the expense management process
Automating the process allows a business to determine the lowest FBT liability automatically. It saves time, provides full visibility into expenses and enforces policies to optimise the expense management process.
2. Use clear, descriptive definitions for the expenses
Over-complicated definitions can confuse employees and impact on the quality of data (from a calculation and compliance perspective).
3. Train employees
Make sure employees understand the difference between the travelling and non-travelling employee status, as this impacts the FBT liability.
4. Use an employee master list
An employee master list simplifies the search for employee data and prevents the creation of multiple versions of the same attendees.
5. Review the RBT reporting annually
Don’t assume a specific calculation method will always equate to the lowest FBT liability. Make sure you are using the right method to avoid overpayments occurring.