Calculating the grossed-up value of fringe benefits for payroll tax
Find the grossed-up value of fringe benefits to work out how much payroll tax you need to pay.
Fringe benefits are divided into Type 1 and Type 2 in the Fringe Benefits Tax Assessment Act 1986 (Cwlth) (FBT Act). The type of each fringe benefit depends on whether or not you can claim a GST input tax credit.
Payroll tax must be paid on the grossed-up value of fringe benefits.
The formula is:
(Type 1 aggregate amount + Type 2 aggregate amount) × Type 2 gross-up rate = Grossed-up value
From 1 April 2024, the Type 2 gross-up rate is 1.8868.
Any amended fringe benefit tax assessments you receive from the Australian Taxation Office will affect your payroll tax liability.
The taxable wage value of non-cash benefits (other than fringe benefits) is the higher of the value:
- we determine for these benefits
- agreed between you and the employee
- determined by you.
If the benefit under the FBT Act is nil, the value for payroll tax is also nil.
Also consider…
- Learn about fringe benefits as taxable wages.
- Read about using estimated FBT figures for payroll tax.
- Find out about lodging payroll tax returns.