You need to have records to support any claims and calculations you make. Keeping ordered and accurate records is a foundation of good business practice. 

Because of the different types of expense payment fringe benefits, the specific documentation you’ll need to keep will depend on the type. Generally speaking, you will need to keep records that show the taxable value of each fringe benefit provided to each employee; for example, invoices, receipts, travel diaries.

If your employee has contributed to an expense payment fringe benefit, they need to provide you with documentary evidence of the expense; for example, receipts or invoices or a declaration. 

All declarations, whether made by yourself or by an employee, must be in a form approved by the Commissioner of Taxation. This means there are standards around what must be written in the declaration and agreement of whether it’s electronic or paper. You can find out the details on ato.gov.au. You don’t need to send declarations to the ATO. You need to keep them as part of your business records.

In the situation where a provided benefit is part work and part private use, you must source documentation and declarations from the employee to substantiate the claim that the expense would have been ‘otherwise deductible’ by them. The documentation must be clear about how much of the benefit is work-related and how much is private-use. 

Where the benefit is 100% otherwise deductible you, as the employer, need to complete a No-private-use declaration – expense payment benefits declaration annually. 

How long you need to keep FBT records

You generally need to keep FBT records for 5 years from the date they are prepared, obtained or the transactions completed.