The end of the Fringe Benefit Tax year and why March 31 is important
Ah, March 31. The finishing line of the FBT year, the last day of claiming, spending and a final frantic 24 hours of processing for Maxxia!
It’s the most important day of the year in a lot of ways, and it can also be the most stressful. Let’s take a look at why this time of year is so important when it comes to getting your full salary packaging benefit – and the implications of some different scenarios.
Each FBT year exists in its own ‘bubble’ – therefore you should spend to your full cap limit during the period of April 1 to March 31 to get your full entitlement. Once the clock ticks over from March 31 to April 1, a new cap limit is allocated and the previous limit can no longer be accessed by spending or claiming.
Naturally this means that there are time-related pressures at the end of the FBT year; these mainly revolve around having a large balance late in March.
If someone said that you had $2,000 but you had to spend it in the next three days, you may be surprised at how tricky this can be. Such is the case at the end of the FBT year, where customers may have allowed a high balance to accumulate, which then needs to be claimed or spent before the end of the FBT year.
What is a ‘rollover’?
A rollover occurs when a benefit balance is not spent or claimed and is allowed to ‘rollover’ from March 31 to April 1.
You do not lose this money, which is a common misunderstanding; it stays in whatever benefit it was allocated to. However, the FBT year has now changed, so when you do spend or claim the money it is now reported in the (new) current FBT year, not the previous one.
But weren’t the funds contributed from my pay last FBT year?
Your cap limit is not affected when Maxxia receives contributions from your payroll; your cap is used only when we pay funds to you or to your Maxxia Wallet/Everyday Purchase Card.
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.
Can it be fixed?
If you incur a rollover you may be able to claim the funds using a benefit above the cap (such as Work Related Expenses or Super). Talk to your Maxxia Customer Care consultant for more information.
So, as you can see, avoiding a large rollover is important – which brings us back to why March 31 is so important. Avoiding this scenario is simple enough though; have a plan to spend or claim your funds, keep checking your balance with Maxxia Online and Maxxia App and you’ll ensure a smooth EOFBTY!
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This website contains general information and doesn't take your personal circumstances into account. Seek professional independent advice before making a decision.