Question
We are a Council and we have a register of volunteers who assist with various events held in the city. The volunteers, at times, are provided training in order to undertake ‘meet and greet’ duties for interstate and/or international visitors.
As part of these duties the volunteers may incur expenses such as public transport costs, breakfast & light lunches etc.
The volunteers submit a claim form and are reimbursed for these out of pocket expenses.
Are there any FBT implications for council as a result of these reimbursements?
Answer
For there to be an FBT implication for Council the volunteers would need to be considered employees of Council.
For the volunteers to be considered employees of Council they would need to be in receipt of payments from which Council is liable to deduct pay as you go withholding (PAYGW).
Where a payment is made to a volunteer in respect of incidental or out of pocket expenses and those payments are not related to the volunteer’s income earning activity, the payments are considered reimbursements intended to defray some of the costs they have incurred in acting as a volunteer. As such, the amounts do not have the character of ordinary income related to any income earning activity the volunteer is undertaking in their capacity as a volunteer. No PAYGW is required in such cases.
If this is the case with your volunteers, they are unlikely to be considered employees and as such, no FBT liability should arise.
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