20.1 What is an exempt benefit?
A number of benefits are exempt from fringe benefits tax (FBT). Although these are popularly called ‘exempt fringe benefits’, they are referred to in the FBT legislation as ‘exempt benefits’ – in fact, by definition, an exempt benefit can’t be a fringe benefit.
Exempt benefits are not only exempt from FBT, they are also (with one exception) exempt from income tax in the hands of the employee to whom they are provided. The exception relates to car expense payments, which is explained in section 20.2 .