5.11 Relationship with employees

As the provision of fringe benefits could affect an employee's obligations and entitlements, you may wish to discuss with employees such issues as:

  • which fringe benefits they receive (some employees may not identify some items as being fringe benefits)
  • the actual or approximate value of fringe benefits provided (employees may not be aware of fringe benefits valuation rules)
  • the method used to reasonably apportion the value of shared benefits (where you and your employees can agree on a suitable method, this may reduce the need for detailed record keeping).

In some cases, an employee may wish to reduce the reportable fringe benefits amount shown on their payment summary for future years. Where you and the employee agree, the following options may be considered:

  • replacing fringe benefits with cash salary
  • providing benefits that are exempt from FBT
  • providing benefits that the employee would otherwise have been able to claim as an income tax deduction
  • making employee contributions to reduce the taxable value of a fringe benefit.

The contributions must be made from an employee's after-tax income, and employee contributions towards a particular benefit cannot be applied to reduce the taxable value of any other fringe benefit.

    Last modified: 11 Aug 2016QC 17814