Portable electronic devices that are mainly used for work purposes are exempt from fringe benefits tax (FBT).
The exemption applies to one item per FBT year for items with a substantially identical function (unless it is a replacement item).
However, small businesses can provide employees with more than one work-related portable electronic device in an FBT year – even if they have substantially identical functions. A small business is a business with an aggregated turnover of less than $50 million in an income year that starts or ends in the relevant FBT year.
A portable electronic device is a device that:
- is easily portable and designed for use away from an office environment
- is small and light
- can operate without an external power supply
- is designed as a complete unit.
Portable electronic devices include:
- mobile phones
- laptop and tablet computers
- portable printers
- portable global positioning system (GPS) navigation receivers.
Example: portable electronic devices
ZYA Conveyancing, which is an eligible small business for the purpose of the portable electronic devices exemption, provides an employee with a laptop on 10 April 2021 and a tablet on 25 February 2022 for work-related use.
ZYA Conveyancing can claim an exemption for both devices even though they have substantially identical functions.
If the business did not meet the small business test it may be able to claim an FBT exemption for only the first device because both could have substantially identical functions. The employer may have to pay FBT on the second device.End of example
The following work-related items are exempt from FBT where they are mainly used for work purposes:
- computer software
- protective clothing
- tools of trade.
There is a limit of one item per employee in an FBT year for items that are basically the same, unless it is a replacement item.Check which work-related items are exempt from FBT, such as portable electronic devices and tools of trade.