2024 Fringe Benefits Tax: Part 2

2024 Fringe Benefits Tax: Part 2

The Fringe Benefits Tax (FBT) year ends on 31 March. Last week, we outlined the hotspots for employers and employees, as well as FBT exemption for electric cars.

  • Part 1: hotspots + FBT exemption for electric cars + working with the exemption.
  • Part 2: WFH arrangement + contractor or employee.
  • Part 3: not lodging FBT returns + housekeeping.

Part 2: WFH arrangement + contractor or employee?

Work from home arrangements

Many businesses continue to offer flexible arrangements with team members working from home either on a full-time basis or at least part of the work week. Some businesses may have provided their employees with work-related items to assist with working from home.

Portable electric devices such as laptops and mobile phones are commonly used for work.  Providing such devices to your employees should not trigger a FBT liability, as long they are primarily used by your employees for work.

If an FBT exemption is not available, it is worthwhile instead considering whether the FBT liability of such items could be reduced to the extent the employee could claim a once-only deduction in their personal return (i.e., had they purchased the item themselves).

Contractor or employee?

FBT rules tend to apply when benefits are provided to employees and certain office holders, e.g. directors. FBT should not apply when benefits are provided to genuine independent contractors.

If you are unsure whether your workers are an employee or independent contractor, please talk to our team who will ensure the correct classification of your business’ employment or contractor arrangements.

If you would like to discuss, please contact our office.