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Taxation of Non‐Cash Fringe Benefits
Author(s) -
Parmenter B. R.
Publication year - 1986
Publication title -
australian economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.308
H-Index - 29
eISSN - 1467-8462
pISSN - 0004-9018
DOI - 10.1111/j.1467-8462.1986.tb00644.x
Subject(s) - remuneration , cash , labour economics , payment , wage , economics , revenue , tax reform , income tax , business , wages and salaries , personal income tax , finance , state income tax , public economics , gross income
This article examines the introduction of a fringe benefits tax (FBT) as part of a revenue‐neutral package with personal income tax cuts. With an effective tax‐wage bargain in force, such an FBT package will not increase labour costs overall. It will, however, increase the labour costs of employers who, prior to the tax reform, were paying above average shares of their employees' remuneration in non‐cash benefits. Employers whose pre‐reform labour costs contained relatively low shares of non‐cash payments will experience falls in labour costs.