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  • COVID-19 and fringe benefits tax

    You may provide your employees with benefits you do not usually provide because of COVID-19. This includes paying for items that allow your employees to work from home.

    Fringe benefits tax (FBT) may apply if you provide benefits in addition to salary and wages. However, exemptions and concessions are available, that can reduce (or eliminate) the amount of FBT you pay.

    On this page:

    Not-for-profit salary packaging

    You may provide salary-packaged meal entertainment to your employees to take advantage of an exempt or rebatable cap.

    Arrangements to provide meals may qualify as salary-packaged meal entertainment depending on:

    • the facts and circumstances of the meal
    • how the meal is provided.

    Given the unprecedented circumstances brought about by COVID-19, we will not apply compliance resources to scrutinise expenditure under these arrangements for the:

    • FBT year ending 31 March 2021 – where meals are provided by a supplier that was authorised as a meal entertainment provider as at 1 March 2020
    • FBT year ended 31 March 2020 – when restaurants and public venues were closed.

    Working from home

    You may have provided employees with items to allow them to work from home (or from another location) due to COVID-19.

    Some items will usually be exempt from FBT if they are primarily used by your employees for work. The items include:

    • laptops
    • portable printers
    • other electronic devices.

    Also, the minor benefits exemption or the otherwise deductible rule may apply if you:

    • allow your employee to use a monitor, mouse or keyboard they otherwise use in the workplace, or
    • provide them with stationery or computer consumables or pay for their phone and internet access.

    The minor benefits exemption may apply for minor, infrequent and irregular benefits under $300.

    The otherwise deductible rule allows you to reduce the taxable value of benefits by the amount that your employee can claim a once-only deduction.

    See also:

    Garaging work cars at your employees' homes

    You may have been garaging work cars at your employees' homes due to COVID-19.

    You may not have an FBT liability depending on:

    • the type of vehicle
    • how often the car is driven, and
    • the calculation method you choose for car benefits.

    We have published a fact sheet with more detailed information.

    See also:

    Log books

    Your employees' driving patterns may have changed due to the effects of COVID-19.

    If you use the operating cost method, you may have an existing log book. You can still rely on this log book to make a reasonable estimate of the business kilometres travelled.

    You can also choose to keep a new logbook that's representative of your business use throughout the year.

    We have published a fact sheet with more detailed information.

    See also:

    Accommodation, food and transport

    You will not have to pay FBT if you provide emergency accommodation, food, transport or other assistance to an employee if:

    • the benefit is emergency assistance to provide immediate relief, and
    • the employee is, or is at risk of being, adversely affected by COVID-19.

    In the context of COVID-19, the FBT emergency assistance exemption applies if you provide emergency accommodation, food, transport or other assistance to an affected employee. For example:

    • expenses incurred relocating an employee, including paying for flights home to Australia
    • expenses incurred for food and temporary accommodation if an employee cannot travel due to restrictions (domestic, interstate or intrastate)
    • benefits provided that allow an employee to self-isolate or quarantine
    • transporting or paying for an employee’s transport expenses including car hire and transport to temporary accommodation.

    See also:

    Temporary accommodation and meals for fly-in fly-out and drive-in drive-out employees

    You will not have to pay FBT for benefits considered emergency assistance. This includes providing temporary accommodation and meals to fly-in fly-out or drive-in drive-out employees who are unable to return to their normal residence due to COVID-19 domestic and international travel restrictions.

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    Items that help protect employees from COVID-19

    You may need to pay FBT on items you give your employees to help protect them from contracting COVID-19 while at work. These include:

    • gloves
    • masks
    • sanitisers
    • anti-bacterial spray.

    However, these benefits are exempt from FBT under the emergency assistance exemption if you provide them to employees:

    • who have physical contact with – or are in close proximity to – customers or clients while carrying out their duties, or
    • are involved in cleaning premises.

    Examples of this type of work include:

    • medical (such as doctors, nurses, dentists and allied health workers)
    • cleaning
    • airline
    • hairdressing and beautician
    • retail, café and restaurant.

    If your employees’ specific employment duties are not of the kind described above, the minor benefits exemption may apply if you provide an employee with minor, infrequent and irregular benefits under $300.

    See also:

    Emergency health care

    There is a limited exemption from FBT if you provide emergency health care to an employee affected by COVID-19. It only applies to health care treatment provided:

    • by an employee of yours (or an employee of a related company)
    • on your premises (or premises of the related company)
    • at or adjacent to an employee's worksite.

    If you pay for your employee's ongoing medical or hospital expenses, FBT applies.

    However, if you pay to transport your employee from the workplace to seek medical help, the cost is exempt from FBT.

    See also:

    Flu vaccinations for employees working from home

    Providing flu vaccinations to employees is generally exempt from FBT because it is work-related preventative health care.

    You will not have to pay FBT for providing your employees with a voucher or reimbursement for getting the flu vaccine from a GP or chemist as long as it is available to all employees.

    If only some of your employees choose to receive the flu vaccine, the voucher or reimbursement is still exempt from FBT as long as it is offered to all employees.

    See also:

    COVID-19 testing

    You will not have to pay FBT for providing COVID-19 testing to employees if both of the following apply:

    • testing is carried out by a legally qualified medical practitioner or nurse, and
    • testing is available to all employees.

    As all employees are equally susceptible to contracting the virus, it qualifies for the FBT exemption for work-related medical screening.

    If only some of your employees get COVID-19 tests, the tests are still exempt as long as they are offered to all employees.

    See also:

    Cancelled events

    You will not have to pay FBT if you are required to pay non-refundable costs for cancelled events your employees were due to attend. This is because:

    • the arrangement was between you and the event organisers, not your employees, and
    • you have not provided any fringe benefits to your employees as they did not get to attend the event.

    However, you may have to pay FBT if your employees were required to pay for their attendance at the cancelled event and you reimbursed them. This would be an expense payment fringe benefit – unless the otherwise deductible rule applies.

    See also:

    Last modified: 25 Aug 2020QC 63467