FBT Q&A ‘ Are mayors and councillors employees for FBT purposes?

FBT, Public
Author: Steve Griffiths
1 Mar 2017


Could benefits provided to local government Mayors and Councillors be subject to fringe benefits tax?


An employee for FBT purposes is essentially an individual that is entitled to receive salary or wages. The term salary or wages includes payments to employees, directors and office holders that are subject to pay as you go withholding (PAYGW).

In regards to office holders, s. 12-45 Taxation Administration Act 1953 (TAA) provides that an entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual as a member of a local governing body where there is in effect, in accordance with s. 446-5 TAA, a unanimous resolution by the body that the remuneration of members of the body be subject to withholding under this Part.

In other words, local government Mayors and Councillors will not be considered employees for FBT purposes (and therefore no FBT payable on benefits provided to them) unless the Council has made the above resolution to have payments made to them subject to PAYGW.

This article provides a general summary of the subject covered as at the date it is published. It cannot be relied upon in relation to any specific instance. TaxEd Pty Ltd and any person connected with its production disclaim any liability in connection with any use. It is not intended to be, nor should it be relied upon as, a substitute for professional advice.


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