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Policy Schedule A - FBT Implications for employer and employee

Schedule A - FBT Implications for employer and employee


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Executive Remuneration Vehicle Scheme

Schedule A - FBT Implications for employer and employee

FBT Example:

FBT is applied using the GST Inclusive cost of the Vehicle

Vehicle Cost $55,000 (GST Inclusive)

Formula for calculating FBT using the Statutory Formula is:

FBT Payable = ((A x B) – C) x E x D

Where:

A = Cost Price/Value [includes accessories and dealer charges but excludes purchase stamp duty, insurance and registration costs.]

B = Statutory Percentage of 20%

C = Contributions to vehicle expenses paid for by employee

D = FBT rate of 47%

E = Gross up rate of 2.0802

Gross up rate applied where the University is entitled to a GST credit for GST paid on benefits provided to an employee. The gross up avoids allowing employers the benefit of GST credits for goods and services purchased for the private use of employees. The gross up effectively recovers the GST Credit obtained in providing a Fringe Benefit.

Example 1

Vehicle cost $55,000 (inclusive of GST)

FBT Statutory Formula

$

$

$

$

 

Year 1

Year 2

Year 3

Year 4

Base value

55,000.00

55,000.00

55,000.00

55,000.00

Taxable value (20% of base value)

11,000.00

11,000.00

11,000.00

11,000.00

Grossed-up (2.0806)

22,882.20

22,882.20

22,882.20

22,882.20

FBT Payable (47%)

10,754.63

10,754.63

10,754.63

10,754.63

Example 2

Vehicle cost $65,000 with employee contribution for excess above $55,000 (inclusive of GST)

FBT Statutory Formula

$

$

$

$

 

Year 1

Year 2

Year 3

Year 4

Base value

65,000.00

65,000.00

65,000.00

65,000.00

Excess over $55,000

10,000.00

10,000.00

10,000.00

10,000.00

Taxable value (20% of base value)

13,000.00

13,000.00

13,000.00

13,000.00

Less: employee contribution

-10,000.00

-

-

-

 

3,000.00

13,000.00

13,000.00

13,000.00

Grossed-up (2.0806)

6,240.60

27,042.60

27,042.60

27,042.60

FBT Payable (47%)

2,933.08

12,710.02

12,710.02

12,710.02