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  • Fringe benefits tax and foreign employment income

    Your employer may pay fringe benefits tax (FBT) for a benefit they provide you. You need to include any reportable fringe benefits on your tax return. If you receive any fringe benefits, it may affect your eligibility to claim a foreign income tax offset.

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    Claiming a FITO for foreign tax on a benefit

    If you pay tax in another country on a fringe benefit and your employer is subject to FBT in Australia on the same benefit, you cannot claim a foreign income tax offset (FITO) on the foreign tax you paid on the benefit. This is because you can only claim a FITO on foreign income that is included in your assessable income in Australia. A benefit your employer pays FBT on is not included in your assessable income in Australia.

    FBT living-away-from-home provisions

    If you are working overseas, required to live away from your usual place of residence to perform your employment-related duties, and you meet the requirements of the living-away-from-home (LAFH) provisions, the LAFH provisions can apply.

    The usual record-keeping requirements, such as employee declarations, also still apply.

    FBT as an employee

    Regardless of whether your income is exempt or not, you are not liable for FBT in Australia on the value of fringe benefits your employer provides you with. This is because FBT is an employer obligation. If your employer has to pay FBT, they will advise you of any reportable fringe benefits by including them on your payment summary.

    You must include the amount of any reportable fringe benefits in your tax return, but we do not include this amount when we work out your assessable income. However, it may affect other calculations such as:

    • the Medicare levy surcharge
    • deductions for personal super contributions made before 1 July 2017
    • super co-contribution
    • entitlements to some income-tested government benefits.

    You have to declare the value of any benefits your employer provides you with that are not subject to the FBT regime.

    Timing

    If you’re an employee, you generally can’t claim a tax deduction for any personal super contributions made before 1 July 2017. However, most people, regardless of their employment arrangement, will be able to claim a deduction for any personal super contributions made on or from 1 July 2017.

    Non-cash benefits in Australia

    If your employer does not have to deduct PAYG withholding from your foreign employment income, any non-cash benefits you receive are not subject to FBT. However, you must include the value of the non-cash benefits in your assessable income.

    For more information, see If your foreign employer gives you a non-cash benefit.

      Last modified: 01 Jul 2022QC 23115