Building a healthy business culture is key to creating a thriving business – it can improve employee retention, productivity and a business’ overall reputation. However, many workplaces are stuck in old routines and fail to invest in their staff.
Poor workplace culture can create a multitude of problems, such as high turnover, absenteeism, poor health and workplace stress. Fortunately, business culture can be reinvigorated; here are three tips to help create and maintain a healthy business culture:
Hire the right people
Employees form a significant part of a business’ culture, so it pays to recruit the right people. When hiring new staff make sure they share the same values as your business and will fit into your existing culture. A bad hire can damage employee morale and potentially affect relationships with dozens of customers, which can be detrimental to your business’ culture.
Define your vision
A clearly-defined vision for your business will help set your business apart in the job market and attract high quality employees. Make sure existing employees are on board with your business’ values, mission and overall vision. Familiarise new employees with your brand’s vision and values as early as possible to make sure they understand your expectations and are committed to the mission.
Value employee opinions
Encouraging team contributions helps to create a positive working environment that is open to new ideas and provides employee freedom. Many businesses thrive on teamwork where individuals communicate regularly, encourage one another and pitch in where needed.
For businesses in Australia, providing fringe benefits to employees can be a valuable way to attract and retain talent, as well as incentivise performance.
However, employers need to understand their obligations regarding Fringe Benefits Tax (FBT). The Australian Taxation Office (ATO) administers FBT, a tax on certain non-cash benefits provided to employees in connection with their employment.
Let’s explore the types of fringe benefits subject to FBT to help businesses navigate this complex area of taxation.
Car Fringe Benefits
One common type of fringe benefit is the provision of a car for the private use of employees. This includes company cars, cars leased by the employer, or even reimbursing employees for the costs of using their own cars for work-related travel.
Housing Fringe Benefits
Employers may provide housing or accommodation to employees as part of their employment package. This can include providing rent-free or discounted accommodation, paying for utilities or maintenance, or providing housing allowances.
Expense Payment Fringe Benefits
Expense payment fringe benefits arise when an employer reimburses or pays for expenses incurred by an employee, such as entertainment expenses, travel expenses, or professional association fees.
Loan Fringe Benefits
If an employer provides loans to employees at low or no interest rates, the difference between the interest rate charged and the official rate set by the ATO may be considered a fringe benefit and subject to FBT.
Property Fringe Benefits
Providing employees with property, such as goods or assets, can also result in fringe benefits. This can include items such as computers, phones, or other equipment provided for personal use.
Living Away From Home Allowance (LAFHA)
When employers provide allowances to employees who need to live away from their usual residence for work purposes, such as for temporary work assignments or relocations, these allowances may be subject to FBT.
Entertainment Fringe Benefits
Entertainment fringe benefits arise when employers provide entertainment or recreation to employees or their associates. This can include meals, tickets to events, holidays, or other leisure activities.
Residual Fringe Benefits
Residual fringe benefits encompass any employee benefits that do not fall into one of the categories outlined above. This can include many miscellaneous benefits, such as gym memberships, childcare assistance, or gift vouchers.
Compliance With FBT Obligations
Employers must understand their FBT obligations and ensure compliance with relevant legislation and regulations. This includes accurately identifying and valuing fringe benefits, keeping detailed records, lodging FBT returns on time, and paying any FBT liability by the due date.
Fringe Benefits Tax (FBT) is an essential consideration for businesses that provide non-cash benefits to employees.
By understanding the types of fringe benefits subject to FBT, employers can ensure compliance with tax obligations and avoid potential penalties or liabilities.
Seeking professional advice from tax experts or consultants can also help businesses navigate the complexities of FBT and develop strategies to minimise tax exposure while maximising the value of employee benefits. Why not start a conversation with one of our trusted tax advisers today?