• HOSPITAL AND PUBLIC BENEVOLENT INSTITUTION EMPLOYEES

Fringe Benefits Tax and Hospital and Public Benevolent Institution Employees

Public Hospitals and Public Benevolent Institutions (PBIs) are permitted to pay their staff a limited amount of fringe benefits without having to pay Fringe Benefits Tax (FBT). This means the employee effectively receives these benefits in tax free dollars. The following box explains exactly what dollar value the employees are entitled to. But if you find it too hard just work on the basis that if you work for a Public Hospital you can receive between $8,234 and $9,095 worth of benefits tax free and employees of PBIs can receive between $14,530 and $16,050 worth of benefits tax free.

For the number crunchers
  • You first need to find out whether the benefits you want are subject to GST or not. If they are subject to GST their gross up rate is 2.0647 if not 1.8692. No doubt your parcel will have a mixture of both so each package will need to be calculated individually. Examples of benefits that are not subject to GST include private school fees, mortgage repayments and private health insurance. Employees of public hospitals are entitled to $17,000 grossed up before their employer has to pay FBT and employees of PBIs are entitled to $30,000 grossed up before their employer has to pay FBT. To keep it simple lets assume all the benefits packaged are subject to GST this means an employee of a public hospital can package $17,0000 / 2.0647 = $8,233.64 in actual cost of benefits and an employee of a PBI can package $30,000 / 2.0647 = $14,530 in actual cost of benefits.

Get the FBT for PBIs Booklet for these articles:

  • Basic rules for the exempt part of the package
  • What to do once you have used up your Exempt Portion
  • Employee Contributions
  • Rules to ensure you get the most from packaging a car
  • FBT time
  • Salary packaging
  • FBT Year Draws to a Close
  • And more