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  • Expense payment fringe benefits

    Expense payment fringe benefits may arise when an employee incurs an expense and the employer either:

    • reimburses them for the expense, or
    • directly pays a third-party for the expense.

    The expense needs to be incurred by the employee and can be a business or private expense, or a combination of both.

    Expense payment fringe benefits may also arise when expense payment benefits are provided to an associate of the employee. An 'associate' includes their:

    • parent
    • grandparent
    • brother or sister
    • spouse
    • uncle or aunt
    • nephew or niece
    • child.

    We have recently released virtual introductory sessions to help employers work out whether they are providing an expense payment fringe benefit.

    Employers can register by selecting a date and time that suits them.

    Next step:

    Common expense payment fringe benefits

    Expense payment fringe benefits may include the reimbursement or payment of:

    • car expenses e.g. registration or insurance
    • car parking (if you do not provide the car parking facilities)
    • home mortgage
    • home/desktop computer
    • home telephone and internet
    • employee personal credit card payments
    • health insurance premiums, and
    • self-education expenses.

    See also:

    Exempt expense payment benefits

    There are a number of expense payment benefits that are exempt from fringe benefits tax. These include:

    • portable electronic devices - such as mobile phones, laptop computers, tablets and portable printers – if the items are primarily for use in the employee’s employment. This exemption is limited to one item per FBT year for businesses that are not small businesses, unless it’s a replacement item. Small businesses can provide their employees with more than one work-related portable electronic device each FBT year.
    • computer software
    • protective clothing
    • briefcases
    • tools of trade
    • taxi or ride-share travel (not including limousines) – if the travel is a single trip, beginning or ending at the employee’s place of work.

    See also:

    Benefits that are not expense payment fringe benefits

    A benefit is not an expense payment fringe benefit if the employer directly purchases the goods or service - including through a corporate credit card - and provides it to their employee.

    In these situations, the employer may be providing a property, residual, entertainment-related or tax-exempt body entertainment fringe benefit - depending on the goods or service being provided.

    See also:

    Last modified: 09 Aug 2021QC 43858