Stay across those two areas in Fringe Benefits Tax
1: Employee living away from home
If you provide or reimburse your employees with meal or accommodation expenses for living away from home you’ll need to keep a few key considerations in mind as these are considered living expenses that are private and domestic in nature.
Employees Travelling Overnight
- The ATO has determined that accommodation, food and drink expenses incurred while employee is travelling overnight on work are subject to the otherwise deductible rule.
- This can be used to reduce the value of the fringe benefit.
Employees Required to Live Away
- This is applied if the employee is required to live away from their usual residence for an extended period of time
- Accommodation and meal expenses are considered to be living expenses and any accommodation and food costs reimbursed by company will be subject to fringe benefits tax.
- It is worth considering if any fringe benefits tax concessions/ exemptions are available to reduce the potential fringe benefits tax liability.
Determining if an employee is living away from home.
How do you determine a change in the employee’s regular place of work? The ATO ruling in TR 2021/1 determines that an employee is likely considered to be working at a different location if they are required to spend 3 months or more at this location. In addition, the ATO has also set out various factors in TR 2021/4 for determining if an employee is living away from home:
- Is the length of overall period that the employee is away from their usual residence a long one?
- Is the nature of the accommodation one that it becomes their usual place of residence?
- Has the employee had friends or family visit?
- Accommodation and meal expenses are considered to be living expenses and any accommodation and food costs reimbursed by company will be subject to fringe benefits tax.
We recommend a regular review of travel arrangements for employees who are travelling for work purposes.
Read a detailed report on Fringe Benefits tax.
2. Car Parking Benefit
In June 2021 the ATO has expanded its interpretation of what car parking facilities would be considered a commercial parking station in TR 2021/2. The start date for this new rule has been deferred until April 1st 2022 and it may impact your ability to claim a fringe benefits tax concession for a car parking benefit.
How do you determine whether a car parking facility is considered a commercial parking station? There a number of tests you can apply to determine this:
- Is it operated by a car parking operator? This might include facilities within complexes such as shopping centres, hospitals, and office buildings where the parking management is outsourced.
If not managed by an operator, does it meet any of the following criteria?
- There is clear signage visible from the street indicating the availability of paid parking
- There is a mechanism to control the entry/ exist into the carpark (ie ticketing machines or boom gates)
- It charges more than a nominal fee for paid parking.
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