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Exempt Benefits

Removal and relocation expenses are those costs you incur to transfer or relocate for a work purpose. You can’t claim a deduction for removal or relocation costs. Even if relocating is a condition of your employment when you take up:

  • a transfer in an existing employment
  • new employment with a different employer.

Removal and relocation expenses never have a sufficient connection to earning your employment income or income producing activities. You incur these expenses to start earning employment income so they are private or domestic expenses.

However, Salary Packaging is a mechanism whereby you (the employee / individual) can claim a deduction for relocation expenses.

  • The distinction between entertainment and sustenance, and application of exemptions such as the minor benefit exemption are the most common issues encountered with respect to entertainment
  • Many employers are uncertain as to what is considered to be infrequent and irregular, and what is a reasonable total value of associated benefits, incurring high cost of compliance
  • The ATO acknowledge the above concerns and recognise there are challenges

These are key areas in FBT Compliance and will be discussed in our 2023 FBT Workshops: https://fbtsolutions.com.au/fbt-return-preparation-full-day-workshops/

To help you get ready for FBT 2023 we are running 8 full day Face to Face FBT Workshops and 2 full day Online Workshops across the country in February and March 2023. Here is the full list of locations and dates:

ONLINE: Tuesday 21 February 2023
Sydney: Wednesday 1 March 2023, Hilton Hotel – 488 George Street
Parramatta: Friday 3 March 2023, Novotel – 350 Church Street
Canberra: Thursday 9 March 2023, Novotel – 65 Northbourne Ave
Brisbane: Tuesday 14 March 2023, Hilton Hotel – 190 Elizabeth Street
Melbourne: Thursday 16 March 2023 Marriott Hotel – Corner Exhibition &, Lonsdale Streets
Perth: Tuesday 21 March 2023, Parmelia Hilton Hotel – 14 Mill Street
Adelaide: Thursday 23 March 2023, Hilton Hotel – 233 Victoria Square
Sydney: Tuesday 28 March 2023, Hilton Hotel – 488 George Street
ONLINE: Thursday 30 March 2023

Electric Car FBT exemption awaiting Royal Assent

The exemption will cover zero or low emission vehicles, with values below the luxury car tax threshold for fuel efficient cars (currently $84,916), being:

  • Battery electric vehicles
  • Hydrogen fuel cell electric vehicles
  • Plug-in hybrid electric vehicles

Second hand cars can qualify, but only if their first retail sale was on 1 July 2022 or later.

Salary packaged cars qualify for the exemption.

The exemption does not cover vehicles other than ‘cars’ as defined in the FBT law. Any vehicles designed to carry one tonne or more, or nine passengers or more, will not qualify for this particular exemption. (however the existing residual benefit exemption may apply).

The exemption applies retrospectively from 1 July 2022, to cars first held and used by a person on 1 July 2022 or later. Cars ordered prior to 1 July 2022 will qualify if they were not delivered until 1 July 2022 or later.

Plug-in hybrid electric vehicles will no longer be exempt from FBT after 1 April 2025. Pre-existing arrangements with such cars can continue as FBT exempt until the end of the particular arrangement.

Private use of these cars will still result in reportable fringe benefits for employees, including for employees of not-for-profit employers. Therefore employers will still need to perform FBT related calculations for these vehicles.