Fringe Benefits Tax

Fringe Benefits Tax

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COVID-19 and the Government's (ATO) response has had an impact on the FBT landscape for 2020-2021. Here we look at the most common questions around FBT during the economic downturn.


FAQ

FAQ

FBT and working from home

Q: Will I need to pay FBT if I provide an employee with items to allow them to work from home due to COVID-19?

A: If you provide your employees with a laptop and a portable printer or other portable electronic devices to enable them to work from home or from another location due to COVID-19, these will usually be exempt from FBT if they are primarily used for your employee's employment.

If you allow your employee to use a monitor, mouse or keyboard they otherwise use in the workplace, or if you provide them with stationery or computer consumables or pay for their phone and internet access, the minor benefits exemption or the otherwise deductible rule may apply.

The minor benefits exemption may apply for minor, infrequent and irregular benefits of less than $300.

The otherwise deductible rule allows you to reduce the taxable value of benefits by the amount for which your employee would be able to claim a once-only deduction.

COVID-19 protective items

Q: If I give my employees gloves, face masks, sanitisers and anti-bacterial spray to protect them from contracting COVID-19 while at work, do I need to pay FBT on these benefits?

A: It depends. These benefits will be exempt from FBT under the emergency assistance exemption if you provide them to your employees to carry out their duties that require them to have physical contact or be in close proximity to customers or clients while carrying out their duties or they are involved in cleaning premises.

Examples of this type of work include the:

  1. medical industry (such as doctors, nurses, dentists and allied health workers)
  2. cleaning industry
  3. airline industry
  4. hairdressing and beautician industry
  5. retail, café and restaurant industry.

If your employees' specific employment duties are not of the kind described above, the minor benefits exemption may apply if you provide an employee with minor, infrequent and irregular benefits of less than $300.

Emergency health care

Q: Will I need to pay FBT if I provide emergency health care to an employee affected by COVID-19?

A: Exemptions from FBT for emergency health care is limited. They only apply to health care treatment provided to an employee of yours (or an employee of a related company) on your premises (or premises of the related company) or adjacent to an employee's worksite.

If you pay for your employee's ongoing medical or hospital expenses, FBT applies.

However, if you pay for transporting your employee from the workplace to seek medical assistance, the cost is exempt from FBT.

Flu vaccinations and COVID tests

Q: My employees were unable to get the flu vaccine at the workplace as they were working from home due to COVID-19. Will I need to pay FBT if I provide my employees with a voucher or reimbursement for getting the flu vaccine from a GP or chemist?

A: No, you won't have to pay FBT on a voucher or reimbursement for the costs of an employee's flu vaccine from a GP or chemist, as long as it is available generally to all employees. The same applies to COVID-19 testing if it is available to all staff and is carried out by a legally-qualified medical practitioner or nurse.

FBT and car fringe benefits

Q: How will FBT apply to vehicles provided to employees?

A: Where employees have been garaging their work cars at home due to COVID-19 there can be FBT implications. Normally, a car fringe benefit arises if an employer makes a car available for private use by the employee, or if it is garaged at home.

During the pandemic, if a home garaged car is not being driven – or only for maintenance purposes – the ATO accepts a fringe benefit is not being provided. If you use the operating cost method and maintain appropriate records, there is nil taxable value for the car and no FBT liability.

Where you are not using the operating cost method or don’t have odometer records, an FBT liability will arise as it’s assumed the car is available for private use.

Where you use the operating cost method with an employee vehicle, during the pandemic you can rely on its existing logbook to make a reasonable estimate of the business kilometres travelled or choose to start a new logbook.

Accommodation, food and transport

Q: Will I need to pay FBT if I provide an employee adversely affected by COVID-19 with emergency accommodation, food, transport or other assistance?

A: No, so long as both of the following apply:

  1. The benefit given to your employee is emergency assistance to provide immediate relief.
  2. That employee is, or is at risk of being adversely affected by COVID-19.

In the context of COVID-19, the ATO will accept that the FBT emergency assistance exemption applies if you, as an employer, have provided emergency accommodation, food, transport or other assistance to an affected employee.

Exempt assistance would cover, for example:

  1. expenses incurred relocating an affected employee due to COVID-19, including paying for flights for overseas to return to Australia
  2. expenses incurred providing food and temporary accommodation if an affected employee is unable to travel due to travel restrictions (including domestic, interstate or intrastate travel)
  3. benefits provided that allow the affected employee to self-isolate or be quarantined
  4. transporting or paying for an affected employee's transport expenses including car hire and transport to temporary accommodation.

Q: My employees work on a fly-in fly-out and a drive-in drive-out basis. With the travel restrictions arising from COVID-19, some are not able to return to their normal residence on the days they aren't working. I'm paying for their temporary accommodation and meals while they can't return home. Do I have to pay FBT for the accommodation and meals I am providing?

A: No, you won't have to pay FBT for the temporary accommodation and meals provided to your employees who are unable to return to their normal residence due to domestic and international travel restrictions in response to COVID-19. These benefits are considered emergency assistance and are exempt from FBT.


More

More

Learn more about Fringe Benefits Tax with our blog posts and this quick video overview from our in-house FBT expert, Janolla Weatherhead.

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