Fringe Benefits Tax

Date

2.2 Tax expenditures (continued)

D. Fringe Benefits Tax

The fringe benefits tax benchmark comprises:

  • a tax base including all benefits provided to an employee or an associate of an employee in respect of the employment of the employee;
  • generally, a deduction to the employer for the cost of providing fringe benefits and the amount of fringe benefits tax paid;
  • the tax rate is the employee’s personal marginal income tax rate plus the Medicare levy;
  • the employer as the tax unit; and
  • the fringe benefits tax year as the tax period (1 April to 31 March).
D1 Exemption for compensation-related benefits, occupational health and counselling services and some training courses
Public order and safety ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D1
Estimate Reliability: Not Applicable * Category 2+
Commencement date: 1986 Expiry date:  
Legislative reference: Sections 58J, 58K and 58M of the Fringe Benefits Tax Assessment Act 1986

Certain benefits in relation to compensable work related trauma, medical services and other forms of health care provided in work site first aid posts and medical clinics, work related medical examinations, work related medical screening, work related preventative health care, work related counselling and migrant language training are exempt from fringe benefits tax.

D2 Exemption for safety award benefits up to $200 per year per employee
Public order and safety ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D2
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1986 Expiry date:  
Legislative reference: Section 58R of the Fringe Benefits Tax Assessment Act 1986

An award related to occupational health or an occupational safety achievement that is granted to an employee is exempt from fringe benefits tax if its value does not exceed $200 per year.

D3 Reduction in taxable value for reimbursements of car expenses incurred for occupational health and counselling services and some training courses
Public order and safety ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Reduction in taxable value 2012 TES code: D3
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1986 Expiry date:  
Legislative reference: Section 61F of the Fringe Benefits Tax Assessment Act 1986

The taxable value of a fringe benefit may be reduced where an employee travels in their own car for the purpose of attending a work related medical examination, screening, preventative health care or counselling session, or for migrant language training and is reimbursed on a cents per kilometre basis for the car expenses incurred.

D4 Exemption for benefits provided by certain international organisations
General public services — Foreign affairs and economic aid ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D4
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1986 Expiry date:  
Legislative reference: Section 55 of the Fringe Benefits Tax Assessment Act 1986

An exemption from fringe benefits tax applies to benefits provided by certain international organisations that are exempt from income tax and other taxes by virtue of the International Organisations (Privileges and Immunities) Act 1963 and by organisations established under international agreements to which Australia is a party and which oblige Australia to grant the organisation a general tax exemption.

D5 Exemption for benefits received by Australian Government employees in receipt of military compensation payments
Defence ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
30 25 30 30 30 35 35 35
Tax expenditure type: Exemption 2012 TES code: D5
Estimate Reliability: Low    
Commencement date: 1995 Expiry date:  
Legislative reference: Sections 6AA and 6AB of the Fringe Benefits Tax (Application to the Commonwealth) Act 1986

Benefits provided to Australian Government employees in receipt of military compensation payments are exempt from fringe benefits tax.

D6 Exemption for health care benefits provided to members of the Defence Force
Defence ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
535 540 600 565 615 655 695 740
Tax expenditure type: Exemption 2012 TES code: D6
Estimate Reliability: Medium    
Commencement date: 1995 Expiry date:  
Legislative reference: Section 6AC of the Fringe Benefits Tax (Application to the Commonwealth) Act 1986

All health care benefits provided by the Australian Government to members of the Australian Defence Force (because of their membership) are exempt from fringe benefits tax.

D7 Exemption for war service loans provided under the Defence Service Homes Act 1918
Defence ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
2 2 1 1 1 1 1 1
Tax expenditure type: Exemption 2012 TES code: D7
Estimate Reliability: Medium — High    
Commencement date: 1986 Expiry date:  
Legislative reference: Section 6 of the Fringe Benefits Tax (Application to the Commonwealth) Act 1986

The loan concessions authorised under the Defence Service Homes Act 1918 and made by virtue of an employee’s war service are exempt from fringe benefits tax.

D8 Reduction in taxable value for education costs of children of employees posted overseas
Education ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Reduction in taxable value 2012 TES code: D8
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1986 Expiry date:  
Legislative reference: Section 65A of the Fringe Benefits Tax Assessment Act 1986

The taxable value of fringe benefits including a car, expense payment, property or residual benefit in respect of full-time education of children of employees posted overseas for 28 days or more may be reduced. The extent of the amount of the reduction relates to the period of the employee’s service overseas.

D9 Exemption for travel costs of employees and their families associated with overseas medical treatment
Health ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D9
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1986 Expiry date:  
Legislative reference: Section 58L of the Fringe Benefits Tax Assessment Act 1986

Benefits that meet the costs of travel away from a work place located in a foreign country in order to obtain medical treatment are exempt from fringe benefits tax. Accommodation and meals are also exempt if provided en route.

D10 Philanthropy — exemption for charities promoting the prevention or control of disease in human beings
Health ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
85 90 95 105 110 120 125 130
Tax expenditure type: Exemption 2012 TES code: D10
Estimate Reliability: Medium — High    
Commencement date: 2001 Expiry date:  
Legislative reference: Section 5B and Subsection 57A(5) of the Fringe Benefits Tax Assessment Act 1986

Charitable institutions whose principal activity is to promote the prevention or control of diseases in human beings are provided with an exemption from fringe benefits tax on up to $30,000 of the grossed-up taxable value of fringe benefits per employee.

Excluded from the cap are meal entertainment (such as expenses on a restaurant meal at a social occasion), entertainment facility leasing expenses and car parking. The fringe benefits tax exemption for meal entertainment and entertainment facility leasing expenses is now captured in D15 Philanthropy — exemption from the fringe benefit cap for meal entertainment and entertainment facility leasing expenses.

D11 Philanthropy — exemption for public and not-for-profit hospitals and public ambulance services
Health ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
1,100 1,150 1,250 1,350 1,400 1,500 1,600 1,700
Tax expenditure type: Exemption 2012 TES code: D11
Estimate Reliability: Medium    
Commencement date: 2000 Expiry date:  
Legislative reference: Sections 57A(3) and 57A(4) of the Fringe Benefits Tax Assessment Act 1986

Public and not-for-profit hospitals and public ambulance services are provided with an exemption from fringe benefits tax which is capped up to $17,000 of the grossed-up taxable value of fringe benefits per employee.

Excluded from the $17,000 cap are meal entertainment (such as expenses on a restaurant meal at a social occasion), entertainment facility leasing expenses and car parking. The fringe benefits tax exemption for meal entertainment and entertainment facility leasing expenses is now captured in D15 Philanthropy — exemption from the fringe benefit cap for meal entertainment and entertainment facility leasing expenses.

D12 Exemption for emergency assistance
Social security and welfare ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D12
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1986 Expiry date:  
Legislative reference: Section 58N of the Fringe Benefits Tax Assessment Act 1986

Benefits provided by way of emergency assistance are exempt from fringe benefits tax. Emergency assistance includes certain first aid or other emergency health care; emergency meals, food supplies, clothing, accommodation, transport, or use of household goods; temporary repairs; and any other similar benefit.

D13 Philanthropy — exemption for accommodation, fuel and meals for live-in employees caring for the elderly or disadvantaged
Social security and welfare ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D13
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1986 Expiry date:  
Legislative reference: Sections 58 and 58U of the Fringe Benefits Tax Assessment Act 1986

Certain benefits that are provided to people employed in caring for elderly or disadvantaged persons and who reside with them in their own homes are exempt from fringe benefits tax. The benefits that are exempt are accommodation, residential fuel, meals and other food and drink provided in the home to the employee.

D14 Philanthropy — exemption for public benevolent institutions (excluding public and not-for-profit hospitals)
Social security and welfare ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
890 980 1,100 1,240 1,340 1,450 1,540 1,630
Tax expenditure type: Exemption 2012 TES code: D14
Estimate Reliability: Medium — High    
Commencement date: 2001 Expiry date:  
Legislative reference: Subsection 57A(1) of the Fringe Benefits Tax Assessment Act 1986

Public benevolent institutions (excluding hospital activities) are provided with an exemption from fringe benefits tax which is capped up to $30,000 of the grossed-up taxable value of fringe benefits per employee.

Excluded from the $30,000 cap are meal entertainment (such as expenses on a restaurant meal at a social occasion), entertainment facility leasing expenses and car parking. The fringe benefits tax exemption for meal entertainment and entertainment facility leasing expenses is now captured in D15 Philanthropy — exemption from the fringe benefit cap for meal entertainment and entertainment facility leasing expenses.

D15 Philanthropy — exemption from the fringe benefit cap for meal entertainment and entertainment facility leasing expenses
Social security and welfare ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
305 350 400 450 485 530 565 605
Tax expenditure type: Exemption 2012 TES code: New
Estimate Reliability: Low    
Commencement date: 1 January 2001 Expiry date:  
Legislative reference: Section 5B and Subsections 57A(1) and 57A(5) of the Fringe Benefits Tax Assessment Act 1986

Charitable institutions whose principal activity is to promote the prevention or control of diseases in human beings, public and not-for-profit hospitals and public ambulance services, and public benevolent institutions (excluding hospital activities) are provided with an exemption from fringe benefits tax for meal entertainment (such as expenses on a restaurant meal at a social occasion) and entertainment facility leasing expenses. The fringe benefits tax exemption on these items remains unlimited.

This expenditure was previously reported in D10 Philanthropy — exemptions for charities promoting the prevention or control of disease in human beings, D11 Philanthropy — exemption for public and not-for-profit hospitals and public ambulance services, and D14 Philanthropy — exemption for public benevolent institutions (excluding public and not-for-profit hospitals.

D16 Exemptions for meals for primary production employees in remote areas
Social security and welfare ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D15
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1 April 2000 Expiry date:  
Legislative reference: Section 58ZD of the Fringe Benefits Tax Assessment Act 1986

Meals provided on working days to employees of primary producers who are carrying on business in remote areas are exempt from fringe benefits tax.

D17 Exemption for remote area housing and reduction in taxable value for remote area housing assistance
Housing and community amenities ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
60 60 65 75 80 85 95 100
Tax expenditure type: Exemption, Reduction in taxable value 2012 TES code: D16
Estimate Reliability: Low    
Commencement date: 2000 Expiry date:  
Legislative reference: Sections 58ZC, 59, 60, and 65CC of the Fringe Benefits Tax Assessment Act 1986

Housing benefits arise where an employer grants an employee the right to occupy or use a unit of accommodation as a usual place of residence. Such benefits provided to employees in remote areas are exempt from fringe benefits tax.

The taxable value of housing assistance provided to employees in remote areas is generally reduced by 50 per cent. Housing assistance includes benefits such as housing loans, provision of residential fuel, provision of a discounted house and land, provision of a residential housing ownership scheme, and the payment or reimbursement of rent, the interest accrued on a housing loan and the cost of acquiring a house and land.

D18 Philanthropy — exemption for certain fringe benefits provided to live-in employees providing domestic services to religious institutions and practitioners
Recreation and culture ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D17
Estimate Reliability: Not Applicable * Category 2+
Commencement date: 1986 Expiry date:  
Legislative reference: Section 58T of the Fringe Benefits Tax Assessment Act 1986

Accommodation, household heating fuel, meals and other food an
d drink provided to live-in employees who provide domestic services and are employed by religious institutions or religious practitioners are exempt from fringe benefits tax.

D19 Philanthropy — exemption for fringe benefits provided to certain employees of religious institutions
Recreation and culture ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
80 80 85 90 100 105 110 115
Tax expenditure type: Exemption 2012 TES code: D18
Estimate Reliability: Low    
Commencement date: 1986 Expiry date:  
Legislative reference: Section 57 of the Fringe Benefits Tax Assessment Act 1986

Benefits provided to an employee, or to a spouse or child of the employee, of a religious institution are exempt from fringe benefits tax if the employee is a religious practitioner and only if the benefit is provided principally in respect of pastoral duties or any other duties or activities that are directly related to the practice, study, teaching or propagation of religious beliefs.

D20 Application of statutory formula to value car benefits
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
1,060 1,100 1,110 970 810 790 870 950
Tax expenditure type: Discounted valuation 2012 TES code: D19
Estimate Reliability: Medium — Low    
Commencement date: 1986 Expiry date:  
Legislative reference: Section 9 of the Fringe Benefits Tax Assessment Act 1986

A fringe benefit arises where an employee is provided with a car for private use. A car fringe benefit is valued using either the operating cost method or the statutory formula method.

Under the fringe benefits tax benchmark, the value of a car fringe benefit is the cost of providing the vehicle (for instance, where the vehicle is provided under a lease, the value of the lease payments) plus the associated vehicle running costs.

The statutory formula method is designed to provide employers with a low compliance cost alternative to the operating cost method, eliminating the need to maintain a vehicle log book. The statutory formula method removes the need to explicitly distinguish between the business and private use of a vehicle. Under the statutory formula method, a person’s car fringe benefit is determined by multiplying the relevant statutory rate by the cost of the car.

This approach may result in the undervaluation of the benefit when calculating fringe benefits tax with the result that less tax is paid on car fringe benefits than would be if the cost of the benefit were paid by the employee out of after tax cash remuneration.

Prior to 7:30pm (AEST) on 10 May 2011, the relevant statutory rates used to value car fringe benefits under the statutory formula method were progressive, based on the number of kilometres travelled during the FBT year.

For new contracts entered into after 7:30pm (AEST) on 10 May 2011, the statutory rate is 20 per cent, regardless of the distance travelled, subject to transitional arrangements.

D21 Discounted valuation for board meals
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
4 5 5 6 6 7 7 8
Tax expenditure type: Discounted valuation 2012 TES code: D20
Estimate Reliability: Low    
Commencement date: 1986 Expiry date:  
Legislative reference: Section 36 of the Fringe Benefits Tax Assessment Act 1986

Where an employee is entitled under an industrial award or employment arrangement to accommodation and to at least two meals a day, eligible meals (known as ‘board meals‘) are valued at concessional rates for the purposes of fringe benefits tax.

The taxable value of a board meal is $2 per meal per person, or $1 per meal per person if the person is under the age of 12. Any amount paid for the meal is deducted.

D22 Discounted valuation for car parking fringe benefits
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
15 17 18 19 21 24 26 28
Tax expenditure type: Discounted valuation 2012 TES code: D21
Estimate Reliability: Low    
Commencement date: 1993 Expiry date:  
Legislative reference: Section 39A of the Fringe Benefits Tax Assessment Act 1986

A car parking fringe benefit arises if with
in a one kilometre radius of the premises on which the car is parked there is a commercial parking station that charges a fee for all day parking that is more than a specified car parking threshold calculated by reference to movements in the consumer price index. The threshold for the fringe benefits tax year commencing 1 April 2013 is $8.03. For fees under the threshold no parking fringe benefit arises.

The fringe benefit only applies to cars (any motor-powered road vehicle designed to carry a load of less than one tonne and fewer than nine passengers). Motorcycles are exempt from fringe benefits tax for the purposes of this concession.

The tax expenditure also arises due to the availability of five different methods by which employers can calculate their fringe benefits tax liability for the car parking benefit. The use of these methods may result in the undervaluation of the benefit when calculating fringe benefits tax with the result that less tax is paid on car parking fringe benefits than would be if the cost of the benefit were paid by the employee out of after tax cash remuneration.

D23 Discounted valuation of arm’s length transaction price for in-house property and residual fringe benefits
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Discounted valuation 2012 TES code: D22
Estimate Reliability: Not Applicable * Category 2+
Commencement date: 1986 Expiry date:  
Legislative reference: Sections 42, 48 and 49 of the Fringe Benefits Tax Assessment Act 1986

The taxable value of in-house property fringe benefits and in-house residual fringe benefits is 75 per cent of the lowest retail price charged to the public in the ordinary course of business.

This treatment is not available for in-house fringe benefits accessed by way of a salary sacrifice arrangement entered into from 22 October 2012. Transitional rules apply to continue the current treatment until 1 April 2014 for salary sacrifice arrangements in place prior to 22 October 2012.

This item also includes airline transport fringe benefits provided after 7.30pm (AEST) on 8 May 2012. Where these fringe benefits were provided prior to 7.30pm (AEST) on 8 May 2012, they are separately classified in D25 Discounted valuation of travel for airline employees and travel agents.

D24 Discounted valuation of holidays for employees and their families when posted overseas
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Discounted valuation 2012 TES code: D23
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1986 Expiry date:  
Legislative reference: Sections 61A and 143C of the Fringe Benefits Tax Assessment Act 1986

For fringe benefits tax purposes, the value of an overseas holiday that is provided in accordance with an industry custom or under an industrial award to an employee and their family members when posted overseas is reduced by 50 per cent. Included are overseas transport, meals and accommodation.

The benefit is limited to 50 per cent of a benchmark amount, which is based on the cost of a return airfare to the employee’s home location, and an employee must provide documentary evidence to the employer to substantiate the value of the holiday.

D25 Discounted valuation of travel for airline employees and travel agents
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
7 11 8 Included in D23
Tax expenditure type: Discounted valuation 2012 TES code: D24
Estimate Reliability: Medium    
Commencement date: 1986 Expiry date:  
Legislative reference: Sections 32 and 33 of the Fringe Benefits Tax Assessment Act 1986

The taxable value of an airline transport fringe benefit for airline employees and travel agents is the stand-by value less the employee contribution for airline transport fringe benefits provided before 7.30pm (AEST) on 8 May 2012. For domestic travel, the stand-by value is 37.5 per cent of the lowest publicly advertised, economy airfare charged by the provider, at or about the time of travel, over that route. For international travel, the stand by value is 37.5 per cent of the lowest fare published in Australia as charged by the carrier for travel over that route in the 12 months preceding the end of the year of tax.

For airline transport fringe benefits provided after 7.30pm (AEST) on 8 May 2012, the taxable value is calculated at 75 per cent of the notional value of the benefit. The notional value of the airline transport is 50 per cent of the lowest publicly advertised economy air fare charged for that particular route during the fringe benefits tax year. This is reflected in D23 Discounted valuation of arm’s length transaction price for in-house property and residual fringe benefits.

D26 Discounted value for remote area holiday benefits
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Discounted valuation 2012 TES code: D25
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1986 Expiry date:  
Legislative reference: Sections 60A and 61 of the Fringe Benefits Tax Assessment Act 1986

The value of holiday-related transport benefits (including the cost of appropriate meals and accommodation en route) provided to employees working in a remote area (and any family members living with them in the remote area) are generally reduced by 50 per cent.

D27 Exemption for benefits in relation to compassionate travel
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D26
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1986 Expiry date:  
Legislative reference: Section 58LA of the Fringe Benefits Tax Assessment Act 1986

The cost of transport, meals and accommodation an employer may provide to an employee, or a close relative of an employee that is for compassionate purposes (for example, serious illness or funerals) is exempt from fringe benefits tax.

D28 Exemption for certain loan benefits
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D27
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1986 Expiry date:  
Legislative reference: Section 17 of the Fringe Benefits Tax Assessment Act 1986

Certain in-house loan benefits and certain loans to employees to meet employment-related expenses are exempt from fringe benefits tax.

D29 Exemption for certain long service awards
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D28
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1986 Expiry date:  
Legislative reference: Section 58Q of the Fringe Benefits Tax Assessment Act 1986

Long service awards granted in recognition of 15 years or more service, up to a specified maximum amount, are exempt from fringe benefits tax.

From 1 April 2005, the specified maximum amount increased from $500 to $1,000 where the period of service being recognised by the award is 15 years. Also from 1 April 2005, the maximum additional amount increased from $50 to $100 for each additional year served where an award recognises a period of service greater than 15 years.

D30 Exemption for certain payments to approved worker entitlement funds
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
175 185 200 215 225 245 255 270
Tax expenditure type: Exemption 2012 TES code: D29
Estimate Reliability: Low    
Commencement date: 2003 Expiry date:  
Legislative reference: Sections 58PA and 58PB of the Fringe Benefits Tax Assessment Act 1986

Payments to approved worker entitlement funds for the purposes of providing for entitlements such as redundancy and long service leave of employees are exempt from fringe benefits tax. The funds must be either endorsed by the Commissioner of Taxation or be a long service leave fund established under a Commonwealth, State or Territory law.

D31 Exemption for certain relocation and recruitment expenses
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D30
Estimate Reliability: Not Applicable * Category 2+
Commencement date: 1986 Expiry date:  
Legislative reference: Sections 58A to 58D and 58F of the Fringe Benefits Tax Assessment Act 1986

Certain benefits associated with relocation and recruitment expenses are exempt from fringe benefits tax. The exemption applies to benefits associated with the cost of travelling to attend an interview or selection test, the cost of removal and storage of household effects, costs associated with the sale and/or purchase of a dwelling, costs associated with connecting or reconnecting certain utilities and the costs of providing relocation transport and any meals and accommodation en route.

D32 Exemption for eligible work-related items
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
35 35 40 45 45 50 55 60
Tax expenditure type: Exemption 2012 TES code: D31
Estimate Reliability: Low    
Commencement date: 1995 Expiry date:  
Legislative reference: Section 58X of the Fringe Benefits Tax Assessment Act 1986

Eligible work-related items (such as mobile phones, laptop computers, protective clothing and tools of trade) provided by an employer to an employee are exempt from fringe benefits tax.

From 13 May 2008, this exemption only applies where these items are used primarily for work purposes. In addition, the exemption will generally be limited to one item of each type per employee per year.

D33 Exemption for employee taxi travel to or from their place of work
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D32
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1997 Expiry date:  
Legislative reference: Section 58Z of the Fringe Benefits Tax Assessment Act 1986

Any benefit arising from taxi travel by an employee is exempt from fringe benefits tax if the travel is a single trip beginning or ending at the employee’s place of work.

D34 Exemption for employer contributions to secure childcare places in certain centres
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D33
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1986 Expiry date:  
Legislative reference: Subsection 47(8) of the Fringe Benefits Tax Assessment Act 1986 Section 195 of the A New Tax System (Family Assistance) (Administration) Act 1999

Payments made by employers to obtain priority of access to certain childcare facilities for children of employees are exempt from fringe benefits tax. To be exempt, payments must be made to child care facilities that are eligible to receive Child Care Benefit payments from the Australian Government.

Child care facilities will be eligible for such payments if they are approved by the Secretary of the Department of Education.

D35 Exemption for employer-provided motor vehicle parking
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D34
Estimate Reliability: Not Applicable * Category 2+
Commencement date: 1986, 1993 Expiry date:  
Legislative reference: Section 58G of the Fringe Benefits Tax Assessment Act 1986
Regulation 13A of the Fringe Benefits Tax Regulations 1992

Parking for disabled employees, and parking for employees of scientific, religious, charitable or other public educational institutions, is exempt from fringe benefits tax.

D36 Exemption for engagement of a relocation consultant
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D35
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 2006 Expiry date:  
Legislative reference: 58AA of the Fringe Benefits Tax Assessment Act 1986

Costs associated with the engagement of a relocation consultant where an employee moves residence as part of their employment are exempt from fringe benefits tax if certain criteria are met. A relocation consultant is a person who assists an employee, or his or her family members, to move and settle into a new location.

The criteria to be met are that the benefit is at arm’s length, and documentary evidence of the expenditure is provided to the employer.

D37 Exemption for free or discounted commuter travel for employees of public transport providers
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
30 30 30 35 40 45 45 50
Tax expenditure type: Exemption 2012 TES code: D36
Estimate Reliability: Low    
Commencement date: 1986 Expiry date:  
Legislative reference: Subsection 47(1) of the Fringe Benefits Tax Assessment Act 1986

Where an employer operates a business of providing transport to the public, the provision of free or discounted travel (other than in an aircraft) to employees of that business for the purpose of their travelling to and from work is exempt from fringe benefits tax. Where an employee’s place of work is in a metropolitan area, free or discounted travel on a scheduled service within that area is also exempt from fringe benefits tax.

For benefits provided on or after 22 October 2012, the exemption does not apply where the employee receives the benefit under a salary sacrifice arrangement entered into on or after that date. Transitional rules apply to continue the current treatment until 1 April 2014 for salary sacrifice arrangements in place prior to 22 October 2012.

D38 Exemption for free or discounted travel to and from duty by police officers on public transport
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D37
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 2000 Expiry date:  
Legislative reference: Subsection 47(1A) of the Fringe Benefits Tax Assessment Act 1986

The provision of travel on public transport to police officers for the purpose of travel between the officer’s place of residence and their primary place of employment is exempt from fringe benefits tax.

D39 Exemption for minor benefits
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D38
Estimate Reliability: Not Applicable * Category 2+
Commencement date: 1986 Expiry date:  
Legislative reference: Section 58P of the Fringe Benefits Tax Assessment Act 1986

Minor benefits are exempt fringe benefits. A minor benefit is a benefit which is less than $300 in value and where it is unreasonable to treat the benefit as a fringe benefit. There are criteria to determine whether it is unreasonable to treat a benefit as a fringe benefit. The criteria includes, amongst other things, the infrequency and irregularity with which the benefit and associated benefits are provided.

D40 Exemption for minor private use of company motor vehicle
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D39
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1986 Expiry date:  
Legislative reference: Subsection 47(6) of the Fringe Benefits Tax Assessment Act 1986

Where an employee is provided with the use of a motor vehicle that is not a car, such use is exempt from fringe benefits tax if any private use is restricted to travel to and from work, use which is incidental to travel in the course of duties of employment, and non-work-related use that is minor, infrequent and irregular.

D41 Exemption for private use of business property
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D40
Estimate Reliability: Not Applicable * Category 3+
Commencement date: 1986 Expiry date:  
Legislative reference: Sections 41 and 47(3) of the Fringe Benefits Tax Assessment Act 1986

The personal use of property (other than a motor vehicle) that is provided to or consumed by an employee on a working day on the business premises, or that is provided to an employee and is ordinarily located on the employer’s business premises, and is principally used directly in connection with business operations is exempt from fringe benefits tax.

From 13 May 2008, this exemption excludes meals provided under a salary sacrifice arrangement. These rules, however, do not affect subsidised canteens that are provided to all staff and that are not part of a salary sacrifice arrangement.

D42 Exemption for recreational or childcare facilities on an employer’s business premises
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D41
Estimate Reliability: Not Applicable * Category 2+
Commencement date: 1986 Expiry date:  
Legislative reference: Subsection 47(2) of the Fringe Benefits Tax Assessment Act 1986

Recreational or childcare facilities are exempt from fringe benefits tax if the facilities are provided on an employer’s business premises for the benefit of employees.

D43 Exemption for small business employee car parking
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D42
Estimate Reliability: Not Applicable * Category 2+
Commencement date: 1997 Expiry date:  
Legislative reference: Section 58GA of the Fringe Benefits Tax Assessment Act 1986

Car parking benefits provided to employees of small business employers are exempt from fringe benefits tax if the parking is not provided in a commercial car park. The employer must not be a government body, listed public company or subsidiary of a listed public company, and the employer’s total income must be less than $10 million.

D44 Exemption for the provision of food and drink in certain circumstances
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D43
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1986 Expiry date:  
Legislative reference: Sections 54 and 58V of the Fringe Benefits Tax Assessment Act 1986

Where employees receive meals that are board fringe benefits, any additional food and drink supplied to them, such as morning and afternoon teas, is exempt from fringe benefits tax. Food and drink provided to domestic employees who do not ‘live-in’ may be exempt from fringe benefits tax if consumed by the employee at the place of employment and the employer is a religious institution or individual.

D45 Exemption for transport for oil rig and remote area employees in certain circumstances
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D44
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1986 Expiry date:  
Legislative reference: Subsection 47(7) of the Fringe Benefits Tax Assessment Act 1986

Transport provided to employees in remote areas in Australia or who work on oil rigs or other installations at sea may be exempt from fringe benefits tax. The exemption applies where the employees are provided with accommodation at or near the work site on working days and it would be unreasonable to expect the employees to travel to and from work on a daily basis.

The exemption was extended to employees in remote areas overseas from 1 July 2009.

D46 Exemptions for certain employees training under the Australian Traineeship System
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D45
Estimate Reliability: Not Applicable * Category 1+
Commencement date: 1986 Expiry date:  
Legislative reference: Section 58S of the Fringe Benefits Tax Assessment Act 1986

Food, drink and accommodation provided to people training under the Australian Traineeship System may be exempt from fringe benefits tax. To be exempt, the benefits must be provided in accordance with an award or an industry custom and any benefits relating to food or drink must not be provided at a party, reception or other social function.

D47 Exemptions for employees living away from home
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
370 450 490 330 150 50 40 40
Tax expenditure type: Exemption 2012 TES code: D46
Estimate Reliability: Low    
Commencement date: 1986 Expiry date:  
Legislative reference: Sections 21, 31, 47(5), 58E, 58ZD and 63 of the Fringe Benefits Tax Assessment Act 1986

Accommodation, food, household goods and payments for extra expenses provided to employees living away from their usual place of residence (in order to perform their duties of employment) are exempt from fringe benefits tax.

Arrangements entered into after 7:30pm 8 May 2012 have to satisfy new requirements from 1 October 2012 to access the concessions. Living-away-from-home benefits provided to employees are only exempt for each employee for a maximum period of 12 months at a particular location when the employee continues to maintain a home in Australia (at which they usually reside) for their immediate use and enjoyment at all times while living away from that home for work. The employee must also provide the employer with a declaration about living away from home. Employees who work on a fly-in fly-out or drive-in drive-out basis are not required to maintain a home and are also not subject to the 12 month period, though they still need to provide their employer with a declaration about living away from home.

Arrangements in place before 7:30pm 8 May 2012 are subject to transitional rules until the earlier of 1 July 2014 or the date a new employment contract is entered into, or the existing contract is varied in a material way.

D48 Philanthropy — exemption for donations to deductible gift recipients
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption 2012 TES code: D47
Estimate Reliability: Not Applicable * Category 2+
Commencement date: 1 July 2008 Expiry date:  
Legislative reference: Subsection 148(2A) of the Fringe Benefits Tax Assessment Act 1986

Donations to deductible gift recipients made under salary sacrifice arrangements are exempt from fringe benefits tax.

D49 Reduction in taxable value of certain relocation and recruitment expenses
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Reduction in taxable value 2012 TES code: D48
Estimate Reliability: Not Applicable * Category 2+
Commencement date: 1986 Expiry date:  
Legislative reference: Sections 61B to 61E of the Fringe Benefits Tax Assessment Act 1986

Reductions in taxable value are provided for fringe benefits associated with certain relocation and recruitment expenses. This includes benefits associated with cents per kilometre reimbursements for transport in an employee’s car for relocation travel or travel to attend an interview or selection test, the provision of temporary accommodation, and meals provided to an employee (or family member) while staying in a hotel, motel, hostel or guesthouse which is used for temporary accommodation while relocating.

Some related expenses may be exempt — see the tax expenditure D31 Exemption for certain relocation and recruitment expenses.

D50 Reduction in the aggregate taxable value of in-house fringe benefits
Other economic affairs — Total labour and employment affairs ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Exemption, Reduction in taxable value 2012 TES code: D49
Estimate Reliability: Not Applicable * Category 2+
Commencement date: 1986 Expiry date:  
Legislative reference: Section 62 of the Fringe Benefits Tax Assessment Act 1986

In working out an employer’s fringe benefit tax liability in relation to a particular employee, the total value of in-house fringe benefits provided to that employee is reduced by $1,000.

This means that where an employer provides $1,000 or less of in-house fringe benefits to an individual employee, the employer will not incur a fringe benefit tax liability in relation to those benefits. Where the value exceeds $1,000, the grossed-up value of the employee’s fringe benefit will be reduced by $1,000.

This treatment is not available for in-house fringe benefits accessed by way of a salary sacrifice arrangement entered into from 22 October 2012. Transitional rules apply to continue the current treatment until 1 April 2014 for salary sacrifice arrangements in place prior to 22 October 2012.

D51 Ability to elect a 50/50 method for working out meal entertainment fringe benefits
Other economic affairs — Other economic affairs, nec ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
* * * * * * * *
Tax expenditure type: Record keeping exemption 2012 TES code: D50
Estimate Reliability: Not Applicable * Category 2+
Commencement date: 1995 Expiry date:  
Legislative reference: Sections 37B and 37BA of the Fringe Benefits Tax Assessment Act 1986

An employer may elect that the taxable value of meal entertainment fringe benefits provided to the employer’s employees and associates is half the value of the expenses incurred in an FBT year by the employer in providing meal entertainment benefits generally.

The ability to elect a 50/50 split creates a tax expenditure whenever the value of the fringe benefits provided to employees, but for the ability to elect the 50/50 method, would have been more than half the cost to the employer of providing the meal entertainment benefits.

D52 Philanthropy — rebate for certain not-for-profit, non-government bodies
Other economic affairs — Other economic affairs, nec ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
30 30 45 60 70 80 90 100
Tax expenditure type: Rebate 2012 TES code: D51
Estimate Reliability: Medium    
Commencement date: 1994 Expiry date:  
Legislative reference: Section 65J of the Fringe Benefits Tax Assessment Act 1986

Certain not-for-profit, non-government bodies are eligible for a 48 per cent rebate of the fringe benefits tax that would othe
rwise be payable on up to $30,000 of the grossed-up taxable value of fringe benefits per employee.

In general, the rebate applies to religious institutions, not-for-profit scientific or educational institutions, charitable institutions, schools, trade unions and associations of employers or employees. The rebate also applies to a range of not-for-profit societies, associations or clubs that are entitled to be exempt from income tax.

D53 Record keeping exemption
Other economic affairs — Other economic affairs, nec ($m)
2009‑10 2010‑11 2011‑12 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17
.. .. .. .. .. .. .. ..
Tax expenditure type: Record keeping exemption 2012 TES code: D52
Estimate Reliability: Low    
Commencement date: 1998 Expiry date:  
Legislative reference: Part XIA of the Fringe Benefits Tax Assessment Act 1986

Broadly, if an employer has kept and lodged required fringe benefits tax records, and provides aggregate fringe benefits below a threshold ($7,642 in the year ending 31 March 2013) the employer need not keep or retain full fringe benefits tax records. The employer’s liability to pay fringe benefits tax is based on the liability in the most recent base year instead of the current year.

A base year is a year after 1 April 1996 in which the employer met the conditions given above.