Work-related items provided to employees may be exempt from fringe benefits tax (FBT), depending on how they are provided and used.
Portable electronic devices
Portable electronic devices are exempt from FBT if they are mainly used for work purposes.
Currently, the exemption is limited to one item per employee per FBT year for items that have the same or a substantially identical function, unless the additional item is a replacement.
Small businesses are exempt from this limit and can provide employees with more than one work-related portable electronic device in an FBT year, even if the devices have substantially identical functions.
A small business is a business with an aggregated turnover of less than $50 million in an income year that starts or ends in the relevant FBT year.
A portable electronic device:
- is easily portable and designed for use away from an office environment
- is small and light
- can operate without an external power supply
- is designed as a complete unit.
Examples include:
- mobile phones
- laptop and tablet computers
- portable printers
- calculators
- portable global positioning system (GPS) navigation receivers.
Software, protective clothing, tools of trade
The following items are exempt from FBT when they are provided mainly for work-related use:
- computer software
- protective clothing
- briefcases
- tools of trade.
Currently, the exemption is limited to one item per employee per FBT year for items with the same or substantially identical functions, unless the additional item is a replacement.
Changes to work-related items from 1 April 2027
From 1 April 2027:
- Work-related items provided through a salary sacrifice arrangement such as portable electronic devices, software, protective clothing and tools of trade will no longer be exempt from FBT.
- Employers will be able to provide more than one exempt item mainly for work-related use in the same FBT year, even if the items have the same or a substantially identical function, if they are not provided through a salary sacrifice arrangement.