ATO Interpretative Decision
ATO ID 2005/109
Fringe Benefits Tax
Exempt benefits: vouchers - property consumed by employee on employer's business premisesFOI status: may be released
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
If an employer provides an employee with a voucher that entitles the employee to receive massage services during a working day on the employer's business premises, is this an exempt benefit under section 41 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?
Decision
No. Section 41 of the FBTAA does not apply to exempt the property benefit as the benefit provided is not consumed by the employee.
Facts
The employer on a working day provides a current employee with a voucher which entitles that employee to receive massage services.
The voucher entitles the holder to receive a massage from a third party provider (masseuse) on the employer's business premises during the course of a working day.
The vouchers are purchased by the employer from the masseuse and provided by the employer to its employees prior to the provision of the massage services.
Any employee in possession of a voucher may use it to obtain a massage from the masseuse on the employer's business premises during the course of a working day.
The voucher is a property benefit in accordance with section 40 of the FBTAA.
The voucher is provided to the employee by the employer 'in respect of' the employment of the employee pursuant to subsection 136(1) of FBTAA.
Reasons for Decision
The general effect of section 41 of the FBTAA is to exempt a property benefit where the property is provided to, and consumed by, an employee on a working day on the employer's business premises.
There is no definition of 'consume' in the FBTAA and as such it takes on its ordinary meaning. The Macquarie Dictionary, [Multimedia], version 5.0.0, 1/10/01. defines 'consume' as:
- 1.
- to destroy or expend by use; use up.
- 2.
- to eat or drink up; devour.
The explanatory memorandum to the Fringe Benefits Tax Assessment Bill 1986 in relation to section 41 explained that,
Goods supplied on a working day and consumed on the employer's premises, e.g., a daily ration of beer consumed at work by brewery workers, will not attract tax.
Given the context and the policy intent, it is considered that the meaning of 'consumed' in section 41 of the FBTAA is limited to that which can be eaten, drunk or otherwise devoured.
The act of redeeming a voucher does not fall within this definition of consume. Consequently the voucher is not capable of being consumed for the purposes of section 41 of the FBTAA.
Accordingly, section 41 of the FBTAA does not apply to exempt the property benefit as the benefit provided is not consumed by the employee.
Amendment History
| Date of Amendment | Part | Comment |
|---|---|---|
| 13 March 2026 | Business line | Updated to correct business line |
Year of income: Year ended 31 March 2006
Legislative References:
Fringe Benefits Tax Assessment Act 1986
section 41
Other References:
The Macquarie Dictionary, [Multimedia], version 5.0.0, 1/10/01.
Explanatory memorandum to the Fringe Benefits Tax Assessment Bill 1986.
Keywords
Exempt benefits
Exempt property benefits
Fringe benefits tax
Property fringe benefits
Date reviewed: 3 March 2026
ISSN: 1445-2782