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Contributions to approved worker entitlement funds

Check if contributions for employee long service leave, sick leave or redundancy payments are exempt from FBT.

Last updated 11 January 2023

About worker entitlement funds

A worker entitlement fund (sometimes called a redundancy trust or redundancy fund) is a fund for employee long service leave, sick leave or redundancy payments.

Although these funds operate in a variety of ways, their purpose is to manage employee entitlements and provide portability and protection.

When contributions are exempt

Contributions to cover worker entitlements are exempt benefits where the payments meet all the following conditions:

  • made to an approved worker entitlement fund (these are listed on ABN LookupExternal Link)
  • made under an industrial agreement
  • for leave, redundancy or the reasonable administrative expenses of the fund.

Applying for endorsement

To become endorsed as an approved worker entitlement fund, the fund or entity that operates the fund must apply in writing to:

Australian Taxation Office
PO Box 3000
PENRITH  NSW  2740

When the fund or entity that operates the fund has been endorsed by us, the endorsement is listed on ABN LookupExternal Link.

For more information on:

QC71163