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  • Minor benefits exemption

    A minor benefit is exempt from FBT where it is both:

    • less than $300 in notional taxable value (that is, the value if it was taxable), and
    • unreasonable to be treated as a fringe benefit.

    When the exemption doesn't apply

    Generally, the minor benefits exemption doesn't extend to such benefits as:

    When the exemption applies

    Notional taxable value

    A notional taxable value is the value of the benefit if it was taxable. The notional taxable value must be less than $300 for the minor benefits exemption to apply.

    When you provide an employee with separate benefits that are connected with each other (for example, a meal, a night’s accommodation and taxi travel) you need to look at each individual benefit provided to the employee to see if the notional taxable value of each benefit is less than $300.

    When determining if the notional taxable value of the benefit is less than $300, benefits provided to associates are not included.

    Special rules that apply to car benefits

    There are different rules for car benefits. The notional taxable value of a car benefit is determined by either:

    • apportioning the operating costs of the vehicle, or
    • applying the cents-per-kilometre method.

    Unreasonable to treat the benefit as a fringe benefit

    If the notional taxable value of a benefit is less than $300, you then need to determine if it would be unreasonable to treat the benefit as a fringe benefit. In doing this you need to look at the nature of the benefit provided and consider the following five criteria:

    • The frequency and regularity of the minor benefit – the more frequently and regularly the benefit is provided, the less likely that the benefit will qualify as an exempt benefit.
    • The total of the notional taxable values of the minor benefit and identical or similar benefits – the greater the total value of minor benefits, the less likely it is to qualify as an exempt benefit.
    • The likely total of the notional taxable values of other associated benefits – that is, those provided in connection with the minor benefit.  
      • For example, when a meal that is a minor benefit is provided in connection with a night’s accommodation and taxi travel, which themselves may or may not be a minor benefit, the total of their taxable values must be considered. The greater the total value of other associated benefits, in this case being the accommodation and the taxi travel, the less likely it is that the minor benefit will qualify as an exempt benefit.
    • The practical difficulty in determining what would be the notional taxable value of the minor benefit – this includes consideration of the difficulty for you in keeping the necessary records in relation to the benefit.
    • The circumstances in which the minor benefit and any associated benefits were provided – this includes considering whether the benefit was provided as a result of an unexpected event or whether it could be considered principally as remuneration.

    See also:

    Last modified: 29 Mar 2019QC 43888