Edited version of your private ruling

Authorisation Number: 1012455928724

Ruling

Subject: Living away from home and fly-in fly-out employees

Question 1

Does your employee meet the requirements of sub-paragraph 31E(a)(i) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) if they work on a:

a) 7 days on, 7 days off basis

b) 4 days on, 4 days off basis

c) 4 days on, 3 days off basis

d) 3 days on, 4 days off basis

e) 5 days on, 2 days off basis

Answer

a) Yes

b) Yes

c) No

d) No

e) No

This ruling applies for the following periods:

1 October 2012 - 31 March 2013

1 April 2013 - 31 March 2014

1 April 2014 - 31 March 2015

1 April 2015 - 31 March 2016

The scheme commences on:

1 October 2012

Relevant facts and circumstances

You provide labour under a Labour Hire Agreement to an industry.

On occasion you pay your employees a living away from home allowance in respect of their meals and also provide accommodation for your employees while they are away from home.

You are seeking clarification as to whether your employees meet the condition of working a number of days on a regular and rotational basis and having a number of days off that are not the same days in consecutive weeks, to be regarded as working on a fly-in fly-out basis.

Relevant legislative provisions

Fringe Benefits Tax Assessment Act 1986 sub-paragraph 31E(a)(i).

Reasons for decision

Section 31E of the FBTAA provides the conditions that must be satisfied for an employee to be considered as working on a fly-in fly-out and drive-in drive-out basis.

Subparagraph 31E(a)(i) provides the following requirement:

31E The employee satisfies this section if:

(a) the employee, on a regular and rotational basis:

(i) works for a number of days and has a number of days off (but not the same days in consecutive weeks); and..

This requirement was introduced by the Tax Laws Amendment (2012 Measures No. 4) Act 2012. The revised explanatory memorandum associated with the bill provides the following additional guidance on this matter:

1.48 The employee is considered to be working on a fly-in fly-out or drive-in drive-out (or equivalent) basis when:

on a regular and rotational basis, the employee works for a number of days and has a number of days off which are not the same days in consecutive weeks, such as a standard five day working week and weekend [Schedule 1, Part 1, item 1, subparagraph 31E(a)(i)];

The Tax Office's publication, Fringe benefits tax: a guide for employers, provides the following additional information in respect of this requirement at section 11.9 of the Living-away-from-home allowances fringe benefit chapter (chapter 11):

The employee is considered to be working on a fly-in fly-out or drive-in drive-out (or equivalent) basis when all of the following apply:

- on a regular and rotational basis, the employee works for a number of days and has a number of days off which are not the same days in consecutive weeks (that is, following on week after another without interruption), such as a standard five-day working week and weekend..

The publication then goes on to provide the following example:

An employee works in the mining industry on a 7-day on, 7-day off roster. The employee works Sunday through to Saturday, and has the following Sunday through to Saturday off.

In this case, the employee is not working the same days in consecutive weeks because the employee is working every day in one week, then not working in the next, and is doing this on a rotational basis.

This is contrasted with an employee who works Monday through to Friday and has Saturday and Sunday off, and does the same in the next week. An employee in this instance is working the same days in each week - they are working on a consecutive basis, week after week.

Scenario a) 7 days on, 7 days off

As explained above, this example is included in the publication Fringe benefits tax: a guide for employers. In this scenario, the employee is not working the same days in consecutive weeks because they are working every day in one week, then not working in the next and is doing this on a rotational basis, as outlined below:

7 days on, 7 days off (work days = w, days off = - )

Scenario b) 4 days on, 4 days off

Where an employee works 4 days on, 4 days off; they are not working the same days in consecutive weeks, as outlined below

4 days on, 4 days off (work days = w, days off = - )

Scenario c) 4 days on, 3 days off

Where an employee works 4 days on, 3 days off; they are working the same days in consecutive weeks, as outlined below.

4 days on, 3 days off (work days = w, days off = - )

Scenario d) 3 days on, 4 days off

Where an employee works 3 days on, 4 days off, they are working the same days in consecutive weeks, as outlined below.

3 days on, 4 days off (work days = w, days off = - )

Scenario e) 5 days on, 2 days off

Where an employee works 5 days on, 2 days off, they are working the same days in consecutive weeks, as outlined below.

5 days on, 2 days off (work days = w, days off = - )

Therefore, where an employee works 4 days on and 3 days off; or 3 days on and 4 days off; or 5 days on and 2 days off, they are working the same days on and have the same days off in each consecutive week. The requirement outlined in subparagraph 31E(a)(i) is therefore not met in these cases.