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Businesses that provide benefits to employees during an emergency situation are likely to have assistance costs be exempt from fringe benefits tax (FBT).
It is worthwhile to know what kinds of benefits you as a business owner can provide for different emergencies that will be excluded from FBT. Exemptions will apply to benefits you provide to employees who are being impacted by or will be potentially impacted by:
- A natural disaster, such as a bushfire, flood or cyclone.
- An accident, such as a car accident.
- A serious illness, such as cancer.
- An armed conflict, such as a war.
- A civil disturbance, such as a riot.
The types of benefits you provide to your employees that can be exempt from FBT include health care, temporary repairs or emergency needs such as food supplies, clothing, accommodation, transport or household goods.
Short-term benefits you provide to an employee such as temporary repairs to damaged property due to a natural disaster are exempt from FBT. However, long-term benefits provided to employees after an emergency event will not be exempt, such as a replacement car, new house or ongoing renovations.
When providing health care, there are certain requirements that must be followed. FBT exemptions only apply to health care provided:
- For an employee of yours or from a related company.
- On your premises or the premises of a related company.
- By a company doctor at an accident site.
- At or near an employee’s worksite.
If you decide to pay for your employee’s ongoing medical or hospital bills, then the FBT exemption will not apply.
The costs of benefits would be deductible to the employer but not assessable to the employee and will not appear as part of their salary and wages on their payment summary.