FBT Solutions

02 8079 2924

OSR Audits

What is the total cost of a $1,100 taxable fringe benefit?

1.  FBT – $1,056
2.  Payroll Tax – $113 (average)
3.  Workers Compensation – $103 (estimate)
4.  Benefit acquisition (less GST) – $1,000

Total cost = $2,272 = no good for salary packaging!


ATO focus on contractors

Contractors focus –

•  ATO conducted 1,100 audits on businesses that were suspected to be incorrectly employees as contractors
•  Data on payments made to 41,000 contractors, 18,000 were assessed as individuals (ie employee’s)
•  Overall 48% employee’s incorrectly categorised as contractors
•  Significant exposure to FBT (+ Payroll Tax + Super + Workers Comp)
•  ATO have online employee / contractor decision tool

 

 


What is a contractor?

We often get asked – do we pay FBT on contractors. In order to answer that question

What is a contractor?

An independent contractor is an entity that agrees to produce a designated result for an agreed price.

Contractors can include:

sub-contractors

consultants

sole traders

companies

partnerships

trusts.

In most cases, a contractor:

is paid for results achieved

provides all or most of the necessary materials and equipment to complete the work

is free to delegate work to other entities

has freedom in the way the work is done

provides services to the general public and other businesses

is free to accept or refuse work

is in a position to make a profit or loss.