Fringe benefit tax on specific categories of benefits (Fringe benefit tax (FBT

By: Inland Revenue Department  06-Dec-2011
Keywords: Low Interest Loans

Motor vehicles, low-interest loans, free, subsidised or discounted goods and services, employer contributions to funds, insurance and superannuation schemes and other benefits.

As a general rule, as long as you have a vehicle available for an employee to use privately, you will have to pay FBT whether or not your employee actually uses the vehicle privately. But there are certain exemptions from FBT - general and daily.

Rules have changed for employers who are, like banks or financial institutions, lending money to members of the public. Those employers can now choose to value low interest loans provided to employees using either the prescribed rate or alternatively a market rate. Certain criteria apply to what constitutes a market rate. For all other employers the value of the loans must continue to be calculated using the prescribed rates issued by Inland Revenue quarterly.

If goods are provided for an employee at less than the cost to the employer, then this is a fringe benefit. Also if services are provided to an employee at less than the normal cost to the public, this is also a fringe benefit.

Any contributions you make for your employees to any of the following are subject to FBT. This includes contributions to sick, accident or death benefit funds, insurance fund of a friendly society, life, pension, personal accident or sickness policies and superannuation schemes to which ESCT (formerly SSCWT) does not apply.

There are some other benefits that may also be liable to FBT.

Date published: 14 Oct 2004

Keywords: Low Interest Loans

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Low interest loans (Fringe benefit tax on specific categories of benefits

A low-interest loan to employees may not be subject to fringe benefit tax if the loan credit is the same as normal commercial credit or if it is an employee share-purchase scheme. The FBT prescribed interest rates for the years 1993 to 1999 that are used to determine the fringe benefit value of low-interest loans provided to employees.


Motor vehicles (Fringe benefit tax on specific categories of benefits

General exemptions apply to work-related vehicles not available for general private use, work-related vehicles with limited private use, vehicles stored on the employer's premises and vehicles over 3,500 kilograms. Find out the different options for calculating the taxable value of a motor vehicle, including determining the value of pooled vehicles, and calculating the taxable value of the private use of a vehicle.