FBT Q&A – Headphones and headsets – portable electronic devices?

Question

Following on from the recent Q&A titled ‘Reimbursement of ear pod headsets’ (September 2020 TaxEd Update) would you also consider cordless headphones (e.g. Sony Wireless ‘On Ear’ Headphones) to be portable electronic devices and headsets with a microphone (e.g. telephonist style headsets)?

These type of headphones and headsets have their own battery and can operate without an external power supply.

Many of our staff who are working from home are using these headphones for work purposes, e.g. for all ‘zoom’ and equivalent meetings and phone calls so the sound isn’t broadcast from their laptop speakers throughout their home but only into their ears.

We are wanting to see if these wireless headphones/headsets could be allowed to be salary packaged where the employee purchases the item and is reimbursed under a salary packaging scenario.

Answer

We feel there would be a strong argument to conclude that cordless headphones and headsets with a microphone would be considered portable electronic devices for the purposes of section 58X of the FBT Act.

Consistent with the analysis in last month’s Update involving the ear pod Q&A, these headphones and headsets appear to fall within the category of ‘eligible work-related item’ because they are:

  • easily portable and designed for use away from an office environment;
  • small and light;
  • can operate without an external power supply, and
  • designed as a complete unit.

As such, exemption under section 58X should be available provided the ear pods are provided primarily for use in the employee’s employment. Further, it is also possible for the employee to salary package a benefit that is exempt under section 58X (unlike for instance a section 58P minor benefit).

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