Taxable value of an in-house residual expense payment fringe benefit

The taxable value of an in-house residual expense payment fringe benefit is equal to the amount that would be the taxable value under the in-house rules explained in Residual fringe benefits if the service or privilege had constituted an in-house residual fringe benefit. For this purpose, the employee contribution would be the amount of expenditure incurred by the employee (or associate), reduced by the amount you reimburse for pay them.

Further information

As explained in Residual fringe benefits, there have been changes to the valuation of in-house residual benefits provided from 22 October 2012 under a salary packaging arrangement.

End of further information

An employer manufactures petroleum products for sale to the public through independent retail outlets.

An employee purchases petroleum from one of the retailers at the ordinary retail price of $1,000. The employer reimburses the employee $250 of that expense.

The retailer had purchase the petroleum from the employer for $800.

The taxable value of this in-house property expense payment fringe benefit is:

$800 - ($1,000 - $250) = $50

The effect is that, irrespective of whether a staff discount is provided directly as a property or residual fringe benefit or indirectly as an expense payment fringe benefit, the taxable value is the same.

    Last modified: 20 Jan 2014QC 17823