Draft Taxation Determination

TD 93/D85

Fringe benefits tax: does an employer have a liability under the Fringe Benefits Tax Assessment Act 1986 in relation to the payment of costs for a home telephone of an employee?

  • Please note that the PDF version is the authorised version of this draft ruling.
    This document has been finalised by TD 93/96.

FOI status:

draft only - for comment


Draft Taxation Determinations (TDs) present the preliminary, though considered, views of the ATO. Draft TDs may not be relied on; only final TDs are authoritative statements of the ATO.

1. Yes. These costs are an expense payment benefit under section 20.

2. The employer's fringe benefits tax liability is based on the personal use of the telephone by the employee. The taxable value of the benefit, which is the telephone cost paid for by the employer, is reduced by that proportion of the telephone expense that the employee would have been entitled to claim as an income tax deduction, if he/she had not been paid or reimbursed by the employer. This is in accordance with the 'otherwise deductible rule' of section 24.

3. The employer requires a written declaration from the employee (in the approved format) before the due date of lodgment of the FBT return. This declaration should detail the total expense relating to the telephone and the percentage of the costs that relate to business activities. This percentage should take into account the rental portion of the telephone bill where the employee is on-call and would normally be entitled to claim an income tax deduction for that amount.

Example WXY pays for the cost of an employee's home telephone totalling $150. The total cost comprises $100 for calls and $50 for rental. The employee's declaration in the approved format details the total expense relating to the telephone and that 50% of the calls are for business purposes. The employer is subject to fringe benefits tax on the following amount:

$100 (being the total of $150 less $50 for business purposes), if the employee is not on-call, or
$75 (being the total of $150 reduced by 50%), if the employee is on-call.

Commissioner of Taxation
1 April 1993



ISSN 1038 - 8982

Related Rulings/Determinations:

IT 85
MT 2021

Subject References:
expense payment fringe benefits
fringe benefits tax
telephone expenses

Legislative References: