What you need to know about end of FBT year and why March 31 is important
The finishing line of the Fringe Benefit Tax year is in sight. March 31 is always a hectic day at RemServ with 24 hours of last minute processing as many of our customers spend frantically to use up their remaining balances.
So the end of March can be a stressful time. Let’s take a look at how you can ensure you get your full salary packaging benefit before the end of the Fringe Benefit Tax year, and avoid that panic at the eleventh hour on March 31.
The FBT year runs from April 1 to March 31, and once the clock ticks over a new cap limit is allocated – so you should try to spend your full cap limit within that 12 month period in order to receive your full entitlement.
Some people end up with a large balance remaining, late in March, and experience time-related stress because of this. You’d be surprised how tricky it can be to spend a couple of thousand dollars when the pressure is on. This is why end of FBT year can be a full-on time for us at RemServ, and for our customers. It’s best to spend your balance before March 31 and avoid a rollover.
So, what is a ‘rollover’?
A rollover is exactly what it sounds like – when your benefit balance is not spent or claimed by March 31, it ‘rolls over’ into the next Fringe Benefit Tax year. But you don’t lose this money – it remains allocated to the same benefit, but because the FBT year has changed, when you do spend or claim the money – it will be reported in the new FBT year.
Let’s say you salary package the health cap of $9,010, and a balance of $1,000 rolls over from March 31 to April 1. When your new limit of $9,010 is allocated to you on April 1, the $1,000 will automatically become part of this new cap. While you can still salary package the full $9,010, $1,000 of it will be made up of your rollover amount from the previous FBT year.
What can you do about a rollover?
There are ways around this so, even if you have incurred a rollover, you may be able to salary package your full entitlement. Talk to your RemServ Customer Care consultant to find out about whether you may be able to claim funds using a benefit above your cap (such as work related expenses or super).
Obviously, it’s easier to avoid this scenario and have a plan in place to ensure you spend or claim all your available funds in the current FBT year. Keep that all-important date in mind – March 31, and check your balance regularly through RemServ Online and the RemServ app for a stress free EOFBTY.
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Disclaimer: This website contains general information and doesn't take your personal circumstances into account. Seek professional independent advice before making a decision.