Is there a taxable benefit in kind?
- Offering non-cash benefits, like health and life insurance, to Australian-based tax resident employees could lead to Fringe Benefits Tax (FBT) obligations for the Customer. This also applies if a foreign subsidiary provides these benefits to the local subsidiary entity. The tax is imposed on the Customer at a rate of 47% of the grossed-up benefit value.
- FBT is a tax that Customers pay on benefits paid to an employee and their family members in addition to their salary or wages. FBT is calculated on the taxable value of the benefits you provide. This is separate from income tax. Please visit this official government page to read more details.
Does Remote Australia have to withhold PAYE/wage tax and social security from the benefit in kind?
- While there's no tax withholding on non-cash benefits, the Remote Australia entity will be subject to Fringe Benefits Tax (FBT) on health and life insurance.