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Fringe Benefits Tax And COVID-19

The Fringe Benefits Tax (FBT) is applied when you provide benefits to your employees in the wake of the pandemic in addition to their salary and wages. This includes paying for items that allow them to work from home.

With the fringe benefits tax year end coming soon on 31st March 2022, it’s time to know about the deduction, exemptions, and concessions that can reduce the amount of FBT you pay. These include:

  • COVID-19 Vaccination Incentives And Rewards
  • Not-For-Profit Salary Packaging
  • Working From Home
  • Car Parking
  • Car Returned To Employer’s Business Premises
  • Garaging Work Cars At Your Employees’ Homes
  • Log Books
  • Accommodation, Food And Transport
  • Items That Help Protect Employees From COVID-19
  • Emergency Health Care
  • Flu Vaccinations For Employees Working From Home

COVID-19 Vaccination Incentives And Rewards

Employers who provide incentives or rewards to their employees for getting COVID-19 vaccination or booster dose may be applicable for tax and super consequences that differ depending on whether the reward was a cash payment, paid leave, or a non-cash benefit is.

Not-For-Profit Salary Packaging

For a not-for-profit employer who provides salary packaged meals to employees can take advantage of an exempt or rebatable cap. Given the COVID-19 circumstances brought about by COVID-19, ATO will not apply compliance resources to closely inspect the expenditure under these arrangements for the FBT year ending 31st March 2022.

Working From Home

If an employer has provided its employees with items to help them work comfortably from home, FBT exemption will be there. Some items will be exempt from FBT, such as:

  • Laptops
  • Portable Printers
  • Electronic Devices
  • Office Gadgets
  • Stationery
  • Computer Accessories

Car Parking

During COVID-19, many employers asked their employees to garage their company cars at home for security and maintenance purposes. FBT for this purpose would be deemed to be available for private use. Concessions are available to reduce the FBT exposure if:

  • The garaged car is not driven for private purposes
  • The garaged car is driven briefly for the purpose of maintaining the car

Car Returned To Employer’s Business Premises

A car provided by an employer to an employee is not taken to be available for your private use if:

  • the car is returned to the business premises
  • employee cannot gain access to the car
  • employee has given up an entitlement to use the car

Garaging Work Cars At Your Employees’ Homes

If you have been garaging work cars at your employee’s home, you may not have an FBT liability depending on:

  • the type of vehicle
  • how often the car is driven, and
  • calculation method you choose for car benefits

Log Books

In case, an employer uses the operating cost method, you may have access to an existing log book. Employer can rely on this log book to make an estimate of the kilometres travelled for business use. Consider keeping a new logbook that represents your business use for the year.

Accommodation, Food & Transport

Employers won’t have to pay Fringe Benefits Tax if they provide their employees with emergency accommodation, food, transport or other assistance if:

  • the benefit is emergency assistance provided for immediate relief
  • the employee is at risk of being adversely affected by COVID-19

Items That Help Protect Employees From COVID-19

You may need to pay FBT on safety and sanitisation items provided to employees to help protect them from contracting COVID-19 at work. These include:

  • Gloves
  • Masks
  • Sanitisers
  • Anti-Bacterial Spray

Emergency Healthcare

There is an exemption from FBT to some extent if an employer provides emergency healthcare to an employee affected by COVID-19. It applies to healthcare treatment provided:

  • by an employee of your company
  • on your premises or related company
  • at or adjacent to an employee’s worksite

Flu Vaccinations For Employees Working From Home

As a part of work related preventative healthcare, providing flu vaccinations to employees is exempt from FBT. An employer need not have to pay FBT for providing employees with a voucher or reimbursement for getting the flu vaccine.

COVID-19 Testing

An employer may need their employees to undertake COVID-19 testing before starting to come to the workplace. Also, when travelling for work away from the city or country, an employee may need to undergo a PCR or rapid antigen test. When you provide a test or reimburse the cost of a test, you may be providing a fringe benefit.

If you are worried about the fringe benefit tax deductions and exemptions or have any queries, talk to our tax accountants at KPG Taxation for further guidance.