Did you rewarded your staff for getting themselves vaccinated against COVID-19? If yes, it’s time to know about the tax and super obligations related to it. Employers usually gave incentives or rewards to their employers, including:
- cash payments
- paid leaves for getting vaccinated
- transportation to and from the vaccination site
- non-cash gifts, such as vouchers and gift cards
With all these benefits come tax obligations for an employer. If you’ve provided your employees with a cash payment, you must:
- include the payment in employee’s salary and wages
- withhold tax from the payment amount under pay as you go
- include the amount in your employee’s ordinary time earnings.
Employees who receive a non-cash benefit such as a voucher, goods or services, or points in a reward scheme from their employer doesn’t have to declare the amount in a tax return. Some of the non-cash benefits may be reportable fringe benefits.
This all is done for the purpose of determining your tax and super contributions for your employee. In case, you have provided non-cash benefits or rewards to your employees, you may have to pay fringe benefits tax on them unless an exemption applies.
Expenses An Employer May Incur
If you are offering a transportation benefit to your employees by incurring the transport expenses to get to and from the COVID-19 vaccination site, you can’t claim a deduction on this non-cash benefit.
These are considered as employment duties of an employer and expenses are not incurred in carrying out such employment duties. They are private expenses, even if the vaccination is a condition of your employment criteria.
If you are concerned about your tax and super obligations, please feel free to contact our tax accountants at KPG Taxation to guide you through the process and eligibility criteria. We are your trusted accountants in Dandenong who knows the ins and outs of tax obligation better than anyone.