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Finding the right cultural fit

Cultural fit should be considered just as important as competency when making recruitment decisions to benefit your long-term business.

Failing to consider cultural fit can lead to plummeting business productivity, poor performance, lost opportunities, poor public relations and high staff turnover. Successful recruitment judges applicants on more than qualifications and experience alone – it extends to assess cultural fit through personality traits and values.

To best assess whether a candidate will fit into your business’s culture you must understand your business’s culture in terms of values and expectations towards teamwork, communication, customer focus, integrity, respect and so forth. Knowing your business’s vision and values will help set a precedent when making hiring decisions.

Culture can be communicated at the beginning of the hiring process through criteria in the job advertisement, for example, working well under pressure may be a necessity. However, the interview often enables the interviewer to best assess the potential cultural fit, as their CV may not accurately reflect the candidate.

When interviewing applicants, use behavioural style questions to gauge cultural attributes. Behavioural questions, such as “Give me some examples of how you resolved conflict at work,” or “Describe a work environment where you had the most success,” are often a good way of ensuring behaviour is congruent with the style used in your business.

An interview is also a good time to communicate your business’s culture and to identify whether the applicant is motivated to match your culture. Explaining the culture of your business helps the applicant to further assess their own suitability, providing them with the opportunity to opt out if their values do not align.

Ideally, employers should equally consider whether the candidate is qualified to do the job and whether there is a cultural fit for the best hire.

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Understanding Fringe Benefits Tax (FBT) And What It Covers

April 15, 2024

For businesses in Australia, providing fringe benefits to employees can be a valuable way to attract and retain talent, as well as incentivise performance.

However, employers need to understand their obligations regarding Fringe Benefits Tax (FBT). The Australian Taxation Office (ATO) administers FBT, a tax on certain non-cash benefits provided to employees in connection with their employment.

Let’s explore the types of fringe benefits subject to FBT to help businesses navigate this complex area of taxation.

  1. Car Fringe Benefits

One common type of fringe benefit is the provision of a car for the private use of employees. This includes company cars, cars leased by the employer, or even reimbursing employees for the costs of using their own cars for work-related travel.

  1. Housing Fringe Benefits

Employers may provide housing or accommodation to employees as part of their employment package. This can include providing rent-free or discounted accommodation, paying for utilities or maintenance, or providing housing allowances.

  1. Expense Payment Fringe Benefits

Expense payment fringe benefits arise when an employer reimburses or pays for expenses incurred by an employee, such as entertainment expenses, travel expenses, or professional association fees.

  1. Loan Fringe Benefits

If an employer provides loans to employees at low or no interest rates, the difference between the interest rate charged and the official rate set by the ATO may be considered a fringe benefit and subject to FBT.

  1. Property Fringe Benefits

Providing employees with property, such as goods or assets, can also result in fringe benefits. This can include items such as computers, phones, or other equipment provided for personal use.

  1. Living Away From Home Allowance (LAFHA)

When employers provide allowances to employees who need to live away from their usual residence for work purposes, such as for temporary work assignments or relocations, these allowances may be subject to FBT.

  1. Entertainment Fringe Benefits

Entertainment fringe benefits arise when employers provide entertainment or recreation to employees or their associates. This can include meals, tickets to events, holidays, or other leisure activities.

  1. Residual Fringe Benefits

Residual fringe benefits encompass any employee benefits that do not fall into one of the categories outlined above. This can include many miscellaneous benefits, such as gym memberships, childcare assistance, or gift vouchers.

Compliance With FBT Obligations

Employers must understand their FBT obligations and ensure compliance with relevant legislation and regulations. This includes accurately identifying and valuing fringe benefits, keeping detailed records, lodging FBT returns on time, and paying any FBT liability by the due date.

Fringe Benefits Tax (FBT) is an essential consideration for businesses that provide non-cash benefits to employees.

By understanding the types of fringe benefits subject to FBT, employers can ensure compliance with tax obligations and avoid potential penalties or liabilities.

Seeking professional advice from tax experts or consultants can also help businesses navigate the complexities of FBT and develop strategies to minimise tax exposure while maximising the value of employee benefits. Why not start a conversation with one of our trusted tax advisers today?