An employer provides a $30,000 loan to an employee, in respect to their employment, at an interest rate of only 2%. All of the loan monies are used for private purposes. What would be the taxable amount of this loan fringe benefit?

Question

Quizplus · Accepted Answer

The taxable amount of the loan fringe benefit is calculated by determining the difference between the interest that would have been payable at the statutory rate (e.g., 5.37% for the 2023-24 FBT year) and the interest actually paid. The statutory interest on $30,000 at 5.37% is $1,611, and the interest paid at 2% is $600. The difference, $1,011, is the taxable amount.

An Employer Provides a $30,000 Loan to an Employee, in Respect