Non-profit organisations and fringe benefits tax

This information forms Chapter 6 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).

If your organisation provides a fringe benefit to its employees or to associates of its employees, your organisation may have a fringe benefits tax (FBT) liability. Depending on your type of organisation, certain benefits you provide to employees receive concessional FBT treatment. From 1 July 2005, charities that want to access FBT concessions must be endorsed by us.

6.1 Employees, volunteers or contractors

It is important to determine whether an individual is an employee, volunteer or contractor of your organisation. This status may affect the tax treatment between the individual and the organisation. You should always consider the facts and circumstances of each individual when determining whether they are an employee, volunteer or independent contractor.

For the purposes of FBT, an employee is a person who receives (or is entitled to receive) salary or wages, or a benefit that has been provided in respect of their employment. A volunteer is not paid for work. Reimbursing a volunteer for out-of-pocket expenses does not cause them to become an employee. Generally, benefits provided to volunteers don't attract FBT. If an organisation provides non-cash benefits to workers in lieu of salary and wages, FBT can apply.