Webinar 2:

Allowances, FBT, Exemptions and Rebates

Payroll Tax Webinars

Webinar One Understanding the basics – what it is, how it works

Webinar Two Allowances, FBT, exemptions and rebates

Webinar Three Contractors

Webinar Four Groupings

Agenda

• Taxable wages

• Allowances

• Fringe Benefits Tax (FBT) and payroll tax

– How to declare

– Apportioning fringe benefits across states

• Exemptions

• Rebates

What is Taxable? A quick recap

Liable Wages

Salaries & Allowances

Apprentice payments

(not all jurisdictions)

Leave

Super, bonuses &

commissions

Fringe benefits

Termination payments

Shares & Options, & Directors

Fees

Allowances

Taxable

NOT Taxable (unless subject to FBT)

Allowances

Reimbursements*

* substantiated with receipts/claims etc.

Allowances

Specific allowances:

• Motor vehicle

• Accommodation

– Short-term

– Long-term

Exempt Allowances – Motor Vehicle

Must be employee’s own car

Must be for business travel

Exempt up to 68c per Km

Substantiation required

Exempt Allowances – Motor Vehicle

Example Fixed allowance amount: $200 Business kilometres travelled: 100km Less exempt component (100km X 68 cents) - $68 Taxable portion of allowance $132

E K R X Exemption Rate (66c) Kilometre

Exempt Allowances – Accommodation

$280.75 per night exempt where paid

to the employee

ATO reasonable amounts for daily travel

Room $147.00 Incidentals $20.05 Meals $113.70 $280.75

Charge-backs Reimbursement

Exempt Allowances – Accommodation

Example 1

Mr Beard travels from Adelaide to Melbourne to attend a work meeting and is required to stay overnight. He is paid a daily allowance of $250 to cover room, meals and incidentals.

Allowance $250.00

Less exempt amount $280.75

To declare for payroll tax purposes $0.00

Exempt Allowances – Accommodation

Example 2

Mr Beard travels from Adelaide to Melbourne to attend a work meeting and is required to stay overnight. His employer organises and pays for his accommodation, however he is paid a daily allowance of $150 to cover meals and incidentals.

Allowance $150.00

Less exempt amount for meals and incidentals $113.75

To declare for payroll tax purposes $36.25

Living Away from Home Allowance

Normally triggers an FBT liability

DON’T

DOUBLE DECLARE

PTA-005[V2]

Fringe Benefits Tax

Actual or Estimated?

Wages – Fringe Benefits

Actual Method

Calculate the grossed up fringe benefits each calendar month and declare that amount in each monthly return

= (Type 1 + Type 2 benefits) x Type 2 rate

Wages – Fringe Benefits

Estimated Method

Declare 1/12th of the grossed up FBs

(1 April 2017 – 31 March 2018)

Declare full year’s grossed up FBs (1 April 2018 – 31 March 2019)

Monthly Returns

Annual Reconciliation

Monthly Returns

Annual Reconciliation

Fringe Benefits & Payroll Tax

Declare the relevant component of the total Fringe Benefits provided in each state

$750,000

$250,000

Australian Wages

VictorianWages

SouthAustralianwages

75%

25%

Total Fringe Benefits

% declaredin Vic

% declaredin SA

Exemption & Payments not Liable

Exemptions

• Each jurisdiction has various employee and employer based exemptions

• There are a number of harmonised exemptions

Please refer to your relevant websites or contact centres for further information

Exempt Employers

PBI & charitable

organisations*

Public hospitals

Non-profit private

hospitals

Non-profit private schools

Government – local**, Governors and foreign representatives staff

In some states you need to apply for an exemption Check with the relevant revenue office

*exemption criteria applies to charitable organisations in the Northern Territory, New South Wales, Victoria and Western Australia **not available in Tasmania

PBI & charitable

organisations*

Public hospitals

Non-profit private

hospitals

Non-profit private schools

Government – local**, Governors and foreign representatives staff

Apprentices

#Be mindful that some conditions apply – contact relevant revenue

office for more information

*Rebate may also be available - contact relevant revenue office

for more information

SA NSW TAS VIC

Taxable Taxable#

Rebate*

Taxable#

Taxable#

QLD NT WA ACT

Exempt#

Rebate*

Taxable# Exempt# Taxable (1st year)

Exempt where employee does not take ‘official leave’

Fire and Emergency Services duty

Harmonised Exemptions

Substantiation required

Defence Force Reserves Duty

Leave as a result of membership of Defence Force or Armed Forces

is exempt

Substantiation required

Harmonised Exemptions

Maternity & Adoption Leave

14 weeks full-time or part time equivalent is exempt

Substantiation required

Harmonised Exemptions

PPL Scheme (Cwlth) not taxable

PTA-012 PTA-037

Worker’s Compensation

Harmonised Exemptions

Valid work cover claim lodged?

Compensation amounts exempt

Top-up pay taxable

Week 1 and week 2 compensation deemed to have been received

PTA-015

Rebates

NSW SA QLD VIC

Apprentices & Trainee Wages Job Action Plan

N/A Apprentice and Trainee rebate

Screen Queensland

State Payroll Tax Rebate

Exemption for out of trade apprentices engaged to

complete the same or similar apprenticeship

ACT TAS WA NT

Concession: Employment of School Leavers with Disability

Rebate Scheme (Apprentices,

Trainees & Youth Employees)

Indigenous Wages Rebate

N/A

For further information, contact the relevant revenue office

Payroll Tax Webinars

Webinar One Understanding the basics – what it is, how it works

Webinar Two Allowances, FBT, exemptions and rebates

Webinar Three Contractors

Webinar Four Groupings

Further information

payrolltax.gov.au

NSW SA VIC QLD

revenue.nsw.gov.au 1300 139 815

revenuesa.sa.gov.au 08 8204 9880

sro.vic.gov.au 13 21 61

qld.gov.au 1300 300 734

NT TAS WA ACT

treasury.nt.gov.au 1300 305 353

sro.tas.gov.au 03 6166 4400

wa.gov.au 08 9262 1300

revenue.act.gov.au 02 6207 0079