• Provision of certain work-related items

    Legislative reference: section 58XExternal Link of the FBTAA.

    An FBT exemption applies for the following work-related items:

    • a portable electronic device
    • an item of computer software
    • an item of protective clothing
    • a briefcase
    • a tool of trade.

    Even if you provide your employee with these work-related items, you still need to consider the limitations on the exemption.

    End of attention

    Portable electronic device

    A portable electronic device is a device that is all of the following:

    • easily portable and designed for use away from an office environment
    • small and light
    • can operate without an external power supply
    • designed as a complete unit.

    Examples of portable electronic devices include a mobile phone, calculator, personal digital assistant, laptop, portable printer, and portable global positioning system (GPS) navigation receiver.

    Limitations on exemption

    The exemption is limited to:

    • items primarily for use in your employee's employment - that is, for work-related use
    • one item per FBT year for items that have a substantially identical function, unless the item is a replacement item

    There are no restrictions where you only provide an employee with the use of an item (that is, it is a residual benefit and not an expense payment or property benefit).

    End of attention


    Primarily for use in the employee's employment

    An item is primarily for use in the employee's employment if it is provided principally to enable your employee to do their job.

    When determining whether or not an item is primarily for use in the employee's employment, the decision is based on the employee's intended use at the time the benefit is provided to them. You don't have to look at the employee's actual usage over the FBT year to determine whether the item is used primarily in the employee's employment.

    However, you must use a reasonable basis to determine whether an item is primarily for use in your employee's employment – for example, the employee's job description, duty statement or employment contract.

    Alternatively, if you are aware that there may be private use of an item, you could document factors such as those listed below to determine whether the item is primarily for use in the employee's employment:

    • the reason or reasons the item was provided to your employee
    • the type of work your employee will be performing
    • how the use of the item relates to your employee's employment duties
    • your policy and any conditions relating to the use of the item.
    Substantially identical functions

    An eligible work related item will not be exempt from FBT if earlier in the same FBT year you have provided your employee, by way of an expense payment or property benefit, with an item that has substantially identical functions.


    It is the features or design specifications that are examined when determining whether items have substantially identical functions, not the intended use of the items.

    End of attention

    Items will have substantially identical functions where the functions of two items are the same in most respects. However, items may be different in a number of ways which do not impact on an item's function. For example, colour, shape, brand and design would not generally be relevant considerations when determining whether two items have substantially identical functions.

    Where a tablet computer can perform the functions of a laptop computer, even in a reduced capacity, it would be considered to have substantially identical functions to the laptop computer. However, where a tablet computer is designed primarily as a means of digital media consumption, rather than creation, it would not have substantially identical functions to a laptop.

    Example - Items do not have substantially identical functions

    An employer gives their employee a laptop during the FBT year so that they can work from home and access their email, prepare work related material such as word processing documents and complex spreadsheets and access the internet.

    In the same FBT year, the employer gives that employee a tablet as it is more portable than the laptop and is useful for the employee when they are travelling. The tablet is designed to access email and browse the internet. It is not designed to create word processing documents or complex spreadsheets. The tablet does not have substantially identical functions to the laptop computer and would not be considered to be able to replace the laptop. The tablet would also be exempt from FBT, provided it was used primarily for work-related purposes.

    End of example
    Replacement items

    An item is a replacement item if the previous item is lost or destroyed, or needed replacing because of developments in technology.


    A financial planning company provides its employees with a laptop computer, which is a portable electronic device. The laptop is intended to be used at client visits to provide advice, and also between client visits to produce and update reports.

    The employer doesn't have a policy restricting personal use, and expects that there may be incidental private use of the laptop by the employee. There have been no other laptops provided to the employee during the FBT year.

    The employer doesn't have to pay FBT on the provision of the laptop to its employees and it is exempt under the provision of work-related items exemption – that is:

    • the laptop is provided to the employee principally to enable them to perform their employment duties, and
    • there has only been one laptop provided to the employee during the FBT year.
    End of example
      Last modified: 08 Jan 2014QC 17820