Accounting4Me - FBT Quiz
FBT Quiz: Test your knowledge on Fringe Benefit Tax
Check your answers below.
1. Each New Year, Harry takes his staff-workers out for dinner. This is:
a) a fringe benefit
b) an expense
c) an allowance
d) none of the above
2. Sarah buys her staff rock climbing memberships to help them stay fit. Each membership costs $400. This is:
a) a fringe benefit
b) an expense
c) an allowance
d) none of the above
3. Kurt wants his staff to look professional, so he gives them money to buy their own work suits. This is:
a) a fringe benefit
b) an expense
c) an allowance
d) none of the above
4. Peter is a chef. The restaurant he works at gives him a branded uniform. This is:
a) a fringe benefit
b) an expense
c) an allowance
d) none of the above
5. Hamil drives his own car to meet clients. His boss pays him back for running costs. This is:
a) a fringe benefit
b) an expense
c) an allowance
d) none of the above
6. Jessica rewards her employees with movie vouchers for hitting sales targets. This is:
a) a fringe benefit
b) an expense
c) an allowance
d) none of the above
7. James works for a plumbing company and uses the work van for his weekend trips. This is:
a) a fringe benefit
b) an expense
c) an allowance
d) none of the above
8. Mary runs a soap & shampoo business. She lets her employees buy stock discounted at just above cost price. This is:
a) a fringe benefit
b) an expense
c) an allowance
d) none of the above
9. Nancy is a sole trader who uses her business car for personal trips. This is:
a) a fringe benefit
b) an expense
c) an allowance
d) none of the above
10. Clara makes compulsory employer KiwiSaver contributions for her staff. This is:
a) a fringe benefit
b) an expense
c) an allowance
d) none of the above
Answers:
1. Each New Year, Harry takes his staff-workers out for dinner. This is:
an expense
Staff only enjoy company entertainment at set times - this is an entertainment expense.
2. Sarah buys her staff rock climbing memberships to help them stay fit. Each membership costs $400. This is:
a fringe benefit
Sarah must pay tax on whether or not the staff use the membership. It’s a staff perk but will not qualify for FBT if the amount is under the minimum threshold.
3. Kurt wants his staff to look professional, so he gives them money to buy their own work suits. This is:
an allowance
Payment for employee clothing is treated as normal salary, which is taxed through an employee’s PAYE.
4. Peter is a chef. The restaurant he works at gives him a branded uniform. This is:
an expense
There’s no FBT on a uniform. It’s defined as distinctive work clothing, so a tax exemption applies.
5. Hamil drives his own car to meet clients. His boss pays him back for running costs. This is:
an expense
Payment made to an employee to compensate for on-the-job expenses is a tax-free reimbursement allowance.
6. Jessica rewards her employees with movie vouchers for hitting sales targets. This is:
a fringe benefit
Employment-related gifts or prizes are treated as benefits. But keep in mind, they will not qualify for FBT if the amount falls under the minimum threshold.
7. James works for a plumbing company and uses the work van for his weekend trips. This is:
a fringe benefit
This is a perk, so the company pays FBT whether he uses the van or not.
8. Mary runs a soap & shampoo business. She lets her employees buy stock discounted at just above cost price. This is:
none of the above
You pay FBT on discounted goods if the price to the employee is less than the cost to the employer.
9. Nancy is a sole trader who uses her business car for personal trips. This is:
none of the above
FBT does not apply to sole traders.
10. Clara makes compulsory employer KiwiSaver contributions for her staff. This is:
an expense
FBT does not apply to compulsory KiwiSaver employer contributions. These are taxed via ESCT. FBT applies to any KiwiSaver employer contribution not subject to ESCT or PAYE.
