Loan and debt waiver fringe benefits

This information forms Chapter 8 of Fringe benefits tax - a guide for employers. Remember, a fringe benefit may be provided by another person on behalf of an employer. It may also be provided to another person on behalf of an employee (for example, a relative).

8.1 What is a debt waiver fringe benefit?

A debt waiver fringe benefit arises where you (the employer) waive or forgive the whole or part of an employee's debt. For example, if you sold goods to an employee and later tell them not to bother about paying the invoiced amount, you have provided a debt waiver fringe benefit.

A debt owed by an employee that is written off as a genuine bad debt is not a debt waiver fringe benefit.