FBT and Tax Management

Tax Management is made simple with ProSpend. Our tax wizard is designed for Australian FBT and GST as well as used globally with configurable tax options.

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50/50 METHOD

50/50 Method

As a general rule, the 50/50 method comes into play when you do not have all the attendee data.

The 50/50 method calculates FBT on 50% of the total taxable value of fringe benefits incurred by providing meal entertainment during the FBT year. The total meal entertainment expenditure includes expenses that might otherwise be exempt from FBT or not normally subject to FBT.

ACTUAL METHOD

Actual Method

This method is used to calculate the taxable value based on actual expenditure. It is usually appropriate when organisations can identify the attendees of the majority of meals and entertainment provided at individual events or the total value of all meals and entertainment during the FBT year.

Recipients are automatically presented to your employees from your user database and the recipient fields are customisable with your terminology so it makes sense to your people

TAX MANAGEMENT

Multiple Tax Rates

DEFAULT RATES - Tax rates can be configured for different country or locations

NO TAX - Any expense can be configured for No Tax, like mileage and the user is unable to edit

MULTIPLE TAX RATES - Employees can edit entire tax amounts or apply different rates for different items in an expense

EXPORT TAX RATES - For accounting systems that use tax codes, ProSpend is configured accordingly so the correct tax is exported

EXCEPTION HANDLING -Automatically removes the GST for lost receipts based on a set of rules

FOR FINANCE MANAGERS

Track and Report

Our on-demand and real time FBT reporting analyses FBT data from within expense manager and simplifies the return process.

The FBT Report can be run at any point in time across a number of criteria including a date range, status, category, cost centre, expense type (only FBT related expense types are available) and by claimant.

A gross up factor and tax rate is defaulted to the report. If a company is eligible to claim a minor benefit exception amount this can also be entered in the report criteria and excluded from the report.

Reporting that is detailed and supportive

Detailed recipient information is available to support an organisation's FBT return and a comparison that shows the amount of FBT payable if an organisation lodges an Actual or 50/50 return.

LEAR MORE

FBT is a tax employers pay on certain benefits they provide to their employees, their families, or associates in place of wages or salaries. These benefits can include things like company cars, meal allowances, or entertainment expenses. The tax is separate from income tax and calculated on the taxable value of the fringe benefits provided.

Accurate FBT tracking ensures compliance with tax regulations and helps avoid costly penalties or audits. It also provides insights into employee benefit costs, allowing businesses to manage their expenses effectively and identify opportunities for cost savings.

Automated tracking software like ProSpend simplifies the complex task of recording, categorizing, and calculating fringe benefits. It ensures real-time data accuracy, reduces manual errors, and generates comprehensive reports for easy compliance with tax requirements. This saves time and eliminates the stress of manual record-keeping.

The 50/50 method is a simplified way of calculating FBT for entertainment expenses, such as meals, drinks, or staff functions. Under this method, 50% of all entertainment expenses are deemed taxable and subject to FBT, while the other 50% is considered non-taxable.

This approach eliminates the need to distinguish between employees, their associates, or clients when calculating FBT liability. However, businesses must still maintain accurate records of all entertainment expenses to apply the method correctly and demonstrate compliance.

The actual method for tracking FBT involves calculating the exact taxable value of fringe benefits based on detailed records of their use. For entertainment expenses, this means identifying and recording who benefited (e.g., employees, associates, or clients) and apportioning the costs accordingly. Only the portion of the expense provided to employees and their associates is subject to FBT.

This method offers greater accuracy and may result in a lower FBT liability than the simplified 50/50 method. However, it requires meticulous record-keeping, including participant details, dates, and the nature of the expenses.

Yes, you can track your FBT accurately by whatever method across expenses and invoices in ProSpend

One Unified Platform for spend management and proactive control

Expense Manager

AP Manager

Platform

FBT and Tax Management

Manage your FBT

50/50 Method

Actual Method

Add groups

Multiple Tax Rates

Track and Report

Reporting that is detailed and supportive

Highly configurable

Configurable rates

Adopts & scales with your Platform

No tax as a default

Audit trails

User edit

Fewer choices, fewer mistakes

Need clarification?

What is Fringe Benefits Tax (FBT)?

Why is accurate FBT tracking important?

How can automated tracking software help with FBT compliance?

What is the 50/50 method for tracking FBT, and how does it work?

What is the actual method for tracking FBT, and how does it work?

Does the FBT tracking work across all of ProSpend's modules

One platform for all your business spend