Employers may have provided non-cash benefits to employees that they do not usually provide during the COVID-19 lockdown period. For example, electronic devices, health-related protective items, flu vaccines and COVID-19 testing. Employers should be aware of potential FBT issues with the provision of the benefits above and specifically any FBT exemptions available for the provision of these benefits.
For example, employees working from home may have been provided with work-related items, such as laptops, computer monitors and other electronic devices. The provision of portable electronic devices, such as laptops, tablets and mobile phones, to employees is exempt from FBT provided they are used primarily (e.g. more than 50%) for work purposes. No employee declaration is needed, although the basis of the claim must be justifiable.
The provision of non-portable electronic devices, such as desktop computers, monitors and printers, to employees is also exempt from FBT under the minor benefits exemption provided they cost less than $300 per item and are provided on an infrequent and irregular basis.
Employers may also provide health-related protective items, such as gloves, masks, sanitisers, and anti-bacterial spray, to employees while at work. The ATO accepts that these benefits are exempt from FBT under the emergency assistance exemption if they are provided to employees who have physical contact with, or are in close proximity to, customers or clients while carrying out their duties, or are involved in cleaning premises. For example, health care workers, hairdressers, beauticians and employees working in retail, café and restaurant. For other employees that do not fit the description above, employers may rely on the minor benefits exemption instead.
The provision of flu vaccines to employees is exempt from FBT provided it is available to all employees. Similarly, the provision of COVID-19 testing to employees should also be exempt from FBT provided the testing is carried out by a legally qualified medical practitioner or nurse and is available to all employees.
The ATO has also issued a factsheet providing guidance on the FBT consequences of cars provided to employees during COVID-19. In particular, where an employee has an existing logbook in place, the ATO accepts that the employee can still use the logbook despite changes in driving patterns due to COVID-19. For the period impacted by COVID-19, the employee can make a reasonable estimate of the percentage of business use of the car, taking into account the logbook, odometer records and any changes in the pattern of business use during the period.
Finally, although there are various mechanisms to access the FBT exemption provisions as described above, employers must ensure that they satisfy the specific requirements for each exemption and may need your assistance to confirm that.
If you have any queries about the FBT issues on certain benefits provided during COVID-19, please contact Peter Hong.