A worker entitlement fund (sometimes called a redundancy trust or redundancy fund) is a fund for employee long service leave, sick leave or redundancy payments.
Although these funds operate in a variety of ways, their purpose is to manage employee entitlements and provide portability and protection.
Contributions to cover worker entitlements are exempt benefits where the payments meet all the following conditions:
- made to an approved worker entitlement fund (these are listed on ABN LookupExternal Link)
- made under an industrial agreement
- for leave, redundancy or the reasonable administrative expenses of the fund.
To become endorsed as an approved worker entitlement fund, the fund or entity that operates the fund must apply in writing to:
Australian Taxation Office
PO Box 3000
PENRITH NSW 2740
When the fund or entity that operates the fund has been endorsed by us, the endorsement is listed on ABN LookupExternal Link.
For more information on:
- worker entitlement funds, see FBT guide: 20.9 Worker entitlement contributions
- the endorsement process for approved worker entitlement funds, see Division 426 in Schedule 1 to the Taxation Administration Act 1953
- the requirements for being endorsed as an approved worker entitlement fund, see section 58PB of the Fringe Benefits Tax Assessment Act 1986.