FBT essentials

Overview

Fringe Benefit Tax (FBT) calculation  in TaxLab is structured into three main categories: Benefits, Motor Vehicles, and Employees.

To complete an FBT return, start by importing benefit and motor vehicle data, then allocate these to employees. TaxLab will automatically calculate the FBT and GST liabilities and consolidate them into the Tax Position.

After completing any necessary adjustments and the true-up process in Quarter 4, the system generates the FBT return. This return can be submitted electronically via myIR or printed for manual filing with Inland Revenue (IRD).

Note: The guidance in these support articles is tailored to the IR420 quarterly return, but the same process generally applies to the IR421 income year return and the IR422 annual return.

FBT Settings

FBT settings should be reviewed at the start of every quarter to ensure they align with the information that is to be provided to Inland Revenue (IR). These settings can be accessed and updated by selecting the "More menu" (...) located in the top right-hand corner.

Return type

The default return type is IR420 quarterly, but it can be changed to IR421 income year or IR422 annual return, depending on the reporting period selected.

Auto de-minimis

This setting is off by default. To turn it on, select the Auto De-Minimis button.

FBT rate

By default, the Low Alternate rate is selected. You can change this to either the Single rate or High Alternate rate:

• Low Alternate rate:
   If used, this results in lower payments in any of the Quarters 1–3 but requires alternate rate calculations and reconciliation in Quarter 4 to true-up your full year position.
• Single rate or High Alternate rate:
  Used in all quarters, generally leads to higher overall FBT payments for the year,  but avoids the need for alternate rate calculations at year-end.

Return lock

To maintain data integrity, individual quarters can be locked using the Return lock slider. This prevents further changes once a quarter is finalised.

Subsidised Transport

By default, the $1,000 threshold applies to subsidised transport benefits. You can change this to Pool all benefits, if that better suits reporting needs.

Add an FBT subscription to an entity

After an entity has been created in TaxLab, an FBT subscription must be added to begin working on FBT returns. 

1. From the TaxLab homepage, select the name of the entity you want to add a subscription for.
2. Navigate to the Fringe benefit tax tab.
3. Select Add subscription.
4. Select Open Latest FBT Year.

Access an FBT return

There are two ways to access an entity's FBT return:

From the homepage:

1. Locate the entity on the TaxLab Home page.
2. In the Fringe benefit tax column, select Open.

Alternatively you can access the FBT return from the entity’s home page.

1. Select the entity name from the TaxLab Home screen.
2. Navigate to the Fringe benefit tax tab.
3. Select Open latest FBT year.

Both of these options will take you to the most recent FBT year opened. 

Start a new FBT tax year

1. Open the entity’s FBT return.
2. In the top-right corner select ‘Goto’.
3. Select the tax year required.

What's next?

Check out FBT import template..