Fringe benefits tax (FBT) applies to non-cash benefits provided to employees. It is therefore important to consider what the FBT impact might be on providing Emergency assistance to your employees.
Emergency assistance to assist your employees with the effects of Covid-19 should in some circumstances be exempt from FBT. Emergency benefits should include:
- Emergency accommodation – e.g. if your employee has had to self-isolate at a hotel
- Flights for overseas employees to return to Australia.
- Emergency meals or food supplies; and
- Other similar costs e.g. provision of protective clothing.
If you provide or pay for goods or services to assist your employee who is sick, or is at risk of becoming sick, with COVID-19, this should be exempt from FBT if the benefit is provided for their immediate relief.
The ATO has stated that it will allow the emergency assistance exemption to apply if the assistance is provided to an employee who has been:
- located in a high-risk area and has been relocated; or
- required to self-isolate or be quarantined.
The Department of Health provides information about which countries and regions are considered high risk and when people are required to self-isolate.
Is the provision of health care exempt from FBT?
The FBT exemption for emergency health care is limited to healthcare treatment provided:
- by an employee of yours (or an employee of a related company)
- on your premises (or premises of the related company)
- at or adjacent to an employee's worksite.
Given the difficulty is satisfying the above requirements, few employers will qualify for the exemption in respect of health care expenses. Accordingly, if you pay for your employee's ongoing medical or hospital expenses, FBT will apply.
Please contact your Kelly+Partners Client Director should you have further questions.