• Fly-in fly-out arrangements - residual benefits

    Legislative reference: subsection 47(7)External Link of the FBTAA.

    Transport you provide to employees who work in remote areas in Australia or overseas, or on oil rigs or other installations at sea

    This arrangement, commonly known as 'fly-in fly-out' transport, is exempt where all of the following apply:

    • an employee's usual place of employment is at a remote location in Australia or overseas, or on oil rigs or other installations at sea
    • employees are provided with accommodation at or near the worksite on working days
    • on a regular basis the employee works for a number of days followed by a number of days off, returning to their usual place of residence on their days off
    • you provide the employee with transport between their usual place of residence and their place of employment
    • having regard to the location of the two places, it would be unreasonable to expect the employee to travel to and from work on a daily basis.

    Accommodation is considered to be in a remote area in Australia:

    • If it is not in or near an urban centre. This means the accommodation must be located at least 40 kilometres from a town with a census population between 14,000 and 130,000, and at least 100 kilometres from a town with a census population of 130,000 or more (population figures based on the 1981 Census).
    • If the accommodation is in Zone A or B (for income tax purposes), it must be located at least 40 kilometres from a town with a census population between 28,000 and 130,000, and at least 100 kilometres from a town with a census population of 130,000 or more.

    From 1 April 2007, where the shortest practical surface route between a locality and an eligible urban area includes a route by water, the distance travelled by water is doubled for the purposes of working out how remote that locality is from the eligible urban area.

    Accommodation is considered to be in a remote area overseas:

    • If it is inaccessible or sparsely populated and is not located close to a built up area such as a town or city.

    Factors that should be considered to determine if an overseas location is remote (having regard to comparable Australian standards) are:

    • the distance and time it takes to travel from the worksite to the nearest urban area
    • the population of the nearest urban area
    • accessibility of the overseas site
    • safety and the crime rate, adequacy of local law enforcement, or health risks in the surrounding areas to the worksite (whether the nearest urban area is reasonably safe if adequate precautions are taken, the ability to take safety precautions)
    • location of the worksite relative to the arrival destination in the foreign country – for example, an international airport
    • the quality of the roads between the nearest urban area and the worksite
    • amenities and facilities available at the nearest urban area (in close proximity to the worksite), such as (but not limited to)
      • public transport
      • availability of accommodation/housing
      • a library, public park or other recreational facilities
      • places for buying a variety of foods
      • a reliable electricity supply and access to clean drinking water/running water and a sewage system
      • availability of access to the internet, mobile phone reception and access to facilities such as banks and medical supplies and facilities.
       

    No single factor is expected to be determinative – each location will need to be considered on a case-by-case basis, and all of the factors balanced to see whether it would be considered remote.

    Further information

    For information on remote and non-remote overseas locations, refer to FBT exemption for fly-in/fly-out arrangements.

    End of further information
      Last modified: 08 Jan 2014QC 17820