• 20.9 Other exemptions


    An exempt benefit arises from a loan in any of the following circumstances:

    • You are engaged in the business of money lending and the interest rate on a loan to an employee is fixed at a rate at least equal to the interest applicable under a comparable loan made to a member of the public in the ordinary course of business at about the time the loan was made to the employee.
    • You are engaged in a business of money lending and, for each year of tax over which the loan extends, the rate of interest is variable, but never less than the arm's-length rate you charged on loans made about the time the loan was made to the employee.
    • You advance money to an employee solely for the purpose of meeting expenses to be incurred within a six-month period of the advance being made. The expense must be incurred in carrying out employment-related duties with you (the employer who made the advance), and the expenses must be accounted for by the employee and any excess advance refunded or otherwise offset.
    • You make an advance, repayable within 12 months, to an employee solely to pay a security deposit (for example, rental bond or service connection deposit) in respect of accommodation. The accommodation must give rise to an exempt benefit in accordance with the conditions relating to living-away-from-home accommodation outlined in section 20.4, or the accommodation must be temporary accommodation eligible for a reduced taxable value, in accordance with the relocation concessions explained in section 19.4 of Reductions in fringe benefit taxable value.

    Expense payments – no-private-use declaration

    An expense payment benefit that is covered by a No-private-use declaration - expense payment benefits is an exempt benefit.

    A condition of this exemption is that the expense payment benefit that arises from the reimbursement of expenditure is wholly employment related and that, as such, under the 'otherwise deductible' rule, would have a taxable value of nil.

    In such instances, you will be able to make an annual declaration. The declaration must cover all expense payment benefits provided to employees where you are able to state that the benefits were provided only for employment-related purposes and that there was no private portion.

    The declaration must be in a form approved by the Commissioner and be made by the declaration date (refer to Declarations).

    Food or drink

    Where employees receive meals that are board fringe benefits, any additional food and drink supplied to them, such as morning and afternoon tea, is exempt. However, it is a condition of the exemption that the food and drink must be provided on your premises or worksite – food and drink supplied at a party, reception or other social function is not exempt.

    International organisations, and diplomatic and consular immunities

    Benefits provided by the following employers are exempt benefits:

    • certain international organisations that are exempt from income tax and other taxes by virtue of the International Organisations (Privileges and Immunities) Act 1963
    • organisations established under international agreements to which Australia is a party and which oblige Australia to grant the organisation a general tax exemption.

    A benefit that would be exempt from tax in Australia by the operation of the Consular Privileges and Immunities Act 1972 or the Diplomatic Privileges and Immunities Act 1967 is an exempt benefit.

    Newspapers and periodicals

    The costs of providing newspapers and periodicals to employees for business purposes are exempt benefits. The exemption doesn't apply where the business use is merely incidental.

    Compensable work-related trauma

    Benefits provided for work-related injury are exempt benefits.

    To qualify for exemption, such benefits (for example, the payment of hospital or medical costs or associated ambulance, travel and accommodation costs) must be provided for 'compensable work-related trauma' suffered by an employee.

    Compensable work-related trauma is an injury or disease related to employment, for which the employee is entitled to receive compensation under a workers' compensation law. If the employee's employment is not covered by a workers' compensation law, an ailment will qualify if it would have been compensable if such a law had applied – for example, where public sector employers don't pay workers' compensation insurance but directly compensate the employee.

    Benefits constituted by the insurance cover provided under a workers' compensation insurance policy are also exempt benefits.

    In-house health care facilities

    Medical services and other forms of health care are exempt benefits if provided in worksite first aid posts and medical clinics.

    The exemption applies to any form of care or test relating to a person's health – for example, medical treatment, first aid, physiotherapy, diagnostic services, health counselling or the provision of drugs in a clinic or other medical facility operated wholly or principally to provide health care relating to work-related injuries of employees. Such a clinic must be on your premises, or those of a related company, or at or adjacent to the employees' worksite – for example, a construction site.

    While the clinic or facility must be operated principally for treating employees' work-related injuries, incidental treatment provided in the clinic for illness or injuries not related to work, as well as treatment of members of employees' families, also qualifies for exemption; so does health care provided away from the clinic by a member of the clinic's staff – for example, a home visit by a company doctor.

    Occupational health and migrant language training

    Several categories of work-related health and counselling benefits are exempt benefits:

    • Work-related medical examinations – These are examinations or tests carried out by a medical practitioner, nurse, dentist, optometrist or audiometrist where the employee is required to undergo the examination or test in order to commence new employment, to transfer to a different job with the same employer, or to gain entry to a superannuation fund.
    • Work-related medical screening – This is an examination or test carried out by a medical practitioner, nurse, dentist, optometrist or audiometrist to determine whether the employee is suffering from, or is at risk of suffering from, an injury or illness related to the employee's employment. It is a condition of exemption that the examination or test is carried out as part of a screening program that applies generally to employees with similar work-related risks.
    • Work-related preventative health care – This is any form of care provided by a medical practitioner, nurse, dentist or optometrist for the purpose of preventing the employee from suffering from an injury or illness relating to the employee's employment. It is a condition of exemption that the care is generally provided to employees with similar work-related risks. The provision of drugs, vaccines or other medical preparations in connection with the preventative health care is also exempt.
    • Work-related counselling – This is individual or group counselling (for example, a seminar) related to matters such as safe work practices, health, fitness, stress management, drug or alcohol abuse, rehabilitation or retirement problems. You must provide the benefit in order to improve or maintain the efficiency of employees or prepare them for retirement and not as a form of remuneration. If counselling is given to an associate of an employee (for example, the employee's spouse), the employee must accompany the associate.
    • Migrant language training – This is an English language course attended by a non-English speaking person who is, or intends to be, an immigrant to Australia. The exemption extends to associates of the employee.

    The exemption also applies to benefits that meet the cost of travelling to attend these forms of examinations, screening, preventative health care, counselling or training which, but for the exemption, would be fringe benefits of the following types:

    • a car fringe benefit, where the car is the means of travelling to attend the examination, screening, preventative health care, counselling or training
    • an expense payment fringe benefit, where the expenditure is for transport, meals or accommodation for the person travelling (you must have documentary evidence of the expenditure)
    • a property fringe benefit, consisting of meals for the person travelling
    • a residual fringe benefit, consisting of transport or accommodation for the person travelling.

    Where a cents-per-kilometre reimbursement is made of car expenses incurred in travelling to attend a work-related medical examination, screening, preventative health care, counselling session or migrant language training, this exemption doesn't apply – however, a reduction in taxable value may be available as explained in section 19.3 of Reductions in fringe benefit taxable value.

    Emergency assistance

    Benefits you provide by way of emergency assistance are exempt from FBT.

    Emergency assistance is assistance for immediate relief of a victim, or potential victim, of an emergency where the assistance is any of the following:

    • first aid or other emergency health care
    • emergency meals, food supplies, clothing, accommodation, transport or use of household goods
    • temporary repairs
    • any similar matter.

    For the purposes of this exemption, an emergency is a natural disaster, an armed conflict, a civil disturbance, an accident, a serious illness, or any similar matter.

    If the emergency assistance is health care, the exemption applies only if the treatment is provided by an employee of yours (or a related company), or on your premises (or those of a related company) or at or near an employee's worksite – that is, the exemption would not apply if you pay for an accident victim's medical or hospital bills, but would apply to emergency treatment by a company doctor at the accident site.

    Long-term benefits, such as providing a new house or car to replace one destroyed as a result of an emergency, are not exempt as emergency assistance.

    Minor benefits

    Legislative reference: section 58P of the FBTAA.

    Minor benefits are exempt benefits. A minor benefit is a benefit which is both:

    • less than $300 in value (before 1 April 2007 the amount was less than $100), and
    • unreasonable to treat as a fringe benefit.

    Less than $300 in value

    A minor benefit is a benefit which has a ‘notional taxable value’ of less than $300. The notional taxable value of a minor benefit is, broadly, the amount that would be the taxable value if the benefit was a fringe benefit.

    Where you provide an employee with separate benefits that are in connection with each other (for example, a meal, a night’s accommodation and taxi travel) you need to look at each individual benefit provided to the employee to see if the notional taxable value of each benefit is less than $300.

    When determining if the notional taxable value of the benefit is less than $300, benefits provided to associates are not included.

    If the notional taxable value of a benefit is less than $300, you then need to determine if it would be unreasonable to treat the benefit as a fringe benefit.

    Special rules that apply to car benefits

    There are different rules for car benefits. The notional taxable value of a car benefit is determined by applying the residual fringe benefit rules – that is, to determine whether a car benefit is less than $300, you may either:

    • apportion the operating costs of the vehicle, or
    • apply the cents-per-kilometre method.

    Criteria for determining whether it would be unreasonable to treat the minor benefit as a fringe benefit

    The following five criteria need to be considered when deciding if it would be unreasonable to treat the minor benefit as a fringe benefit:


    The infrequency and irregularity with which associated benefits, being benefits that are identical or similar to the minor benefit and benefits given in connection with the minor benefit, are provided. The more frequently and regularly associated benefits are provided, the less likely that the minor benefit will qualify as an exempt benefit.


    The total of the notional taxable values of the minor benefit and identical or similar benefits to the minor benefit. The greater the total value of the minor benefit and identical or similar benefits, the less likely it is the minor benefit will qualify as an exempt benefit.


    The likely total of the notional taxable values of other associated benefits – that is, those provided in connection with the minor benefit. For example, where a meal, which is a minor benefit, is provided in connection with a night’s accommodation and taxi travel, which themselves may or may not be a minor benefit, the total of their taxable values must be considered. The greater the total value of other associated benefits, in this case being the accommodation and the taxi travel, the less likely it is that the minor benefit will qualify as an exempt benefit.


    The practical difficulty in determining what would be the notional taxable value of the minor benefit and any associated benefits. This would include consideration of the difficulty for you in keeping the necessary records in relation to the benefits.


    The circumstances in which the minor benefit and any associated benefits were provided. This would include consideration as to whether the benefit was provided as a result of an unexpected event, and whether or not it could be considered principally as being in the nature of remuneration.

    If, after considering the five criteria, you conclude that it would be unreasonable to treat the benefit as a fringe benefit, the benefit will be an exempt benefit.

    In determining if the minor benefit exemption applies, you need to examine the nature of the benefit provided and consider each of the various criteria – value, frequency and regularity of provision, and recording and valuation difficulties – before concluding whether the exemption should apply to a minor benefit.

    When the minor benefits exemption doesn't apply

    The exemption doesn't extend to airline transport fringe benefits or other in-house fringe benefits, the taxable values of which are, in any case, reducible by $1,000 under the concession explained in the respective chapters for these types of fringe benefits.

    The exemption also does not apply to minor entertainment benefits provided to employees of income tax-exempt organisations, unless they are incidental to the provision of entertainment to persons who are neither employees of the employer nor associates of employees. However, even in those circumstances, the exemption doesn't apply to meals or benefits provided in connection with meals.

    This later exclusion doesn't prevent minor entertainment benefits provided by a tax-exempt organisation to recognise a special achievement of an employee from being exempt as long as they are provided on the employer's premises or a place where the employee performs their employment-related duties. For example, a meal given to the family of a professional footballer in the club's dining room to mark a milestone such as selection in a representative team, or being awarded best and fairest player, may be exempt under this rule.

    The exemption doesn't apply to meal entertainment where you elect to use the meal entertainment provisions and calculate the taxable value under the 50:50 split method. If you elect to use this valuation rule, all of your expenditure on meal entertainment must be included when calculating your total meal entertainment expenditure for the FBT year.

    Similarly, where you elect to use the 50:50 split method for valuing entertainment facility leasing expenses, the minor benefits exemption doesn't apply.

    However, where you elect to use the 12-week register method for valuing meal entertainment, the minor benefits exemption can apply

    The minor benefits exemption will not apply to benefits that are provided under an effective salary sacrifice arrangement. Benefits provided under a salary sacrifice arrangement are provided principally as part of a remuneration package. When all of the criteria are considered, and in particular the circumstances in which benefits are provided under a salary sacrifice arrangement, it would be reasonable to conclude that all such benefits are not exempt minor benefits.


    It is common practice for employers to give employees gifts on special occasions, such as at Christmas time. A single gift to each employee of, say, a bottle of whisky or perfume would be an exempt benefit, where the value was less than $300. If the gift is provided at a Christmas party, the gift needs to be considered separately to the Christmas party when considering the minor benefits threshold.

    Flowers given to employees on special occasions would be given on an irregular and infrequent basis – this could include flowers given to an employee on the birth of a child, for a birthday, or as a get well gift. These would be an exempt benefit where each individual benefit had a notional taxable value of less than $300 because, looking at the five factors, it would be unreasonable to treat the benefit as a fringe benefit.

    By contrast, flowers given to an employee each fortnight would be given on a frequent and regular basis and would not be an exempt benefit, even where the value of each individual benefit is less than $300.

    The occasional use of one of your vehicles by an employee for a special purpose, such as rubbish removal or for travel from home to work during a transport strike, would be an exempt benefit provided the employee in question doesn't have a general entitlement to use the vehicle for private purposes.

    Subject to the above criteria being satisfied, the following are further examples of benefits that are likely to be exempt under the minor benefits rules:

    • a welcome gift provided to a new employee – for example, a food hamper
    • meals provided on an ad hoc basis to an employee three times in the year, where on each occasion the value is $75
    • tolls provided to an employee through an e-tag facility 20 times during the year, where each benefit has a value of $7
    • a short-term advance to help an employee pay unexpected debts
    • the recovery of overpaid salary by instalment arrangements
    • permitting staff to have waste or leftover materials of a business, such as packing cases or fabric remnants.
    End of example

    Long service awards

    Long service awards granted in recognition of 15 years or more service are exempt, provided the value of the award doesn't exceed a specified maximum amount – for this purpose, the value of the award is the amount that would be the taxable value if the award was a fringe benefit.

    Where the period of service being recognised by the award is 15 years, the specified maximum value is increased to $1,000. If the first long service award received by an employee recognises a period of service greater than 15 years, the maximum value increases from $50 to $100 for each additional year – for example, the maximum value for a first award recognising 20 years' service is $1,500.

    If the employee has received a previous long service award (that is, in recognition of 15 years or more service) from you, the maximum value of any subsequent award is $100 for each year in excess of 15 years that is being recognised by the additional award.

    Where the value of an award exceeds the relevant maximum value, no part of the award is exempt.

    Safety awards

    An award genuinely related to occupational health or occupational safety achievements that is granted to an employee is exempt from tax if its value doesn't exceed $200. Where you grant more than one award to an employee during an FBT year, each award is exempt, provided the aggregate value of the awards doesn't exceed $200 – for this purpose, the value of the award is the amount that would be the taxable value if the award was a fringe benefit.

    Where the $200 limit is exceeded, no part of the award (or awards) is exempt.

    You don't need to keep specific records of awards to individual employees if you can conclude on a reasonable basis that the value of any awards granted to an employee will not exceed the $200 limit.

    Australian Traineeship System

    Food, drink and accommodation provided to people training under the Australian Traineeship System may be exempt benefits. To be exempt, the benefits must be provided in accordance with an award or an industry custom, and must not be provided at a party, reception or other social function.

    Live-in help – elderly or disadvantaged persons

    An exemption from FBT applies to certain benefits that you provide to people who are employed in caring for elderly or disadvantaged persons and who reside with them in their own homes. An elderly person is aged 60 or more. Disadvantaged people are those who are intellectually, psychiatrically or physically handicapped, or who are in necessitous circumstances.

    The benefits that are exempt are:

    • the provision of accommodation, in the home of the person being cared for, to the employee (and to the employee's spouse and children)
    • the provision of residential fuel in connection with that accommodation
    • meals provided in that home to the employee (and to the employee's spouse and children)
    • other food or drink similarly provided.

    Provision of certain work-related items

    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.

    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.

    From 1 April 2016, small businesses with an aggregated turnover of less than the relevant small business turnover threshold (currently $2 million) can provide employees with more than one qualifying work-related portable electronic device, even where the items have substantially similar functions.

    Income tax year and the FBT year do not align; accordingly for the purpose of determining whether an entity is a small business entity for a relevant FBT year, the aggregated turnover must be below the relevant threshold for the year of income:

    • starting most recently after the start of the FBT year, or
    • ending most recently after the start of the FBT year.

    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).

    See also:

    Work out if you're a small business for the income year

    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. This does not apply if the employer is a small business entity.

    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.

    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 are portable electronic devices. The laptops are primarily for use at client visits to provide advice and also between client visits to produce and update reports.

    One of the laptop computers is damaged beyond repair during a client visit. The employee is provided with a new laptop computer. The new laptop computer is a replacement item and the employer is exempted from paying FBT on the provision of the second laptop.

    End of example

    Membership fees and subscriptions

    Expense payment or property benefits arising in respect of the following are exempt benefits:

    • a subscription to a trade or professional journal
    • an entitlement to use a corporate credit card
    • an entitlement to use an airport lounge membership.

    Approved student exchange programs

    A benefit consisting of an employee (or an associate of an employee) being placed in an approved student exchange program is an exempt benefit where you (or an associate) have not selected or taken part in selecting the participant.

    For a program to be approved, it must be run by a body registered with the relevant state or territory body in accordance with the National Guidelines for Student Exchange. These guidelines are published by the National Co-ordinating Committee for International Secondary Student Exchange.

    No fringe benefit where benefit results in a dividend under Division 7A

    Where a loan benefit or a debt waiver benefit is provided by a private company to an employee (or associate) who is also a shareholder (or associate), a fringe benefit will not arise if the loan or debt waiver results in the company being taken to have paid a dividend under Division 7A of the ITAA 1997 to the shareholder (or associate).

    Changes and updates

    The following tables detail any major changes and updates made to this chapter:

    September 2016


    Changes and updates


    20.2 Transport exemptions

    20.8 Other exemptions

    Updated for style changes

    Included the definition of taxi under the FBT law for clarity

    Included information about the work-related items exemption being extended to small businesses with an aggregated turnover of less than the applicable small business turnover threshold that provide employees with more than work-related portable electronic device, where the devices have substantially identical functions.

      Last modified: 05 May 2017QC 17820