An expense payment fringe benefit may arise in either of two ways:
- where you (the employer) reimburse an employee for expenses they incur
- where you pay a third party in satisfaction of expenses incurred by an employee.
Start of example
Example 14: Taxable value of expense payment fringe benefits
You operate a real estate business and pay an employee's home telephone bill of $1,200 for the year ending 31 March 2017. On 31 March 2017, your employee provides you with a declaration stating that 60% of the bills are for business purposes and are, as a result, otherwise deductible. The other 40% of the calls are private calls.
The calculation of the taxable value for the expense payment is:
$1,200 x 60% = $720. $720 is otherwise deductible.
$1,200 - $720 = $480 taxable value.
You would write at item 23: