• 20.6 Property exemptions


    Property you provide to an employee may be an exempt benefit. The exemption applies if the property provided to the employee is both provided and consumed on a working day on your premises (if you are a company, the premises may be those of a related company). For example, there is no FBT on bread rolls given to bakery employees for consumption at work.

    This exemption doesn't apply to:

    • employers who are exempt from income tax when entertainment arises from the provision of food and/or drink
    • income tax-paying bodies who elect to value the entertainment as meal entertainment
    • meals provided under a salary sacrifice arrangement after 7.30pm AEST on 13 May 2008.

    20.7 Worker entitlement contributions

    A worker entitlement fund is a (trust) fund for employee long service leave, sick leave or redundancy payments. These funds are often referred to as redundancy trusts or redundancy funds. Although these funds operate in a variety of ways, their purpose is to manage employee entitlements and provide portability and protection.

    Contributions to worker entitlement funds for the FBT year commencing 1 April 2006, and for all later FBT years, are exempt benefits where the payment is:

    • made to an approved worker entitlement fund
    • made under an industrial agreement, and
    • either for leave, redundancy or the reasonable administrative expenses of the fund.

    A payment made according to an existing industrial practice or an existing fund will not be exempt from FBT unless it satisfies the above criteria.

    Approved worker entitlement funds

    A fund can only be an approved worker entitlement fund if it is limited to making payments to the employee for whom contributions were received. However, upon the death of an employee, the fund is able to make payments to the employee’s dependants or the trustee of the employee’s deceased estate without losing its status as an approved worker entitlement fund.

    Approved worker entitlement funds comprise:

    • all long service leave funds established by or under a Commonwealth, state or territory law
    • funds that have been prescribed in the FBT regulations as approved worker entitlement funds (pre 28 June 2011)
    • funds that we have endorsed since 28 June 2011.

    Funds that were prescribed before 28 June 2011 will be taken to be endorsed from 28 June 2011.

    From 28 June 2011:

    • the Australian Business Registrar (ABR) is required to enter a fund or entity as an endorsed fund or entity on the ABR by 28 December 2012
    • all approved worker entitlement funds must have an Australian business number (ABN)
    • existing funds that did not have an ABN had until 28 December 2011 to obtain an ABN
    • we are able to revoke the endorsement of a worker entitlement fund in certain situations.
      Last modified: 05 May 2017QC 17820