Payroll – COVID-19 frequently asked questions

The ATO has published guidance on some employer issues arising due COVID. The material includes assistance with questions relating to FBT and superannuation.

The ATO has answered some questions frequently asked by employers in relation to matters that are connected with COVID. The information is buried in the ATO website. For ease of considering immediate relevance, we have extracted key material into the accompanying table under the headings listed below:

  1. Not-for-profit employers and salary packaging
  2.  FBT and working from home
  3. FBT on accommodation, food and transport – Emergency
  4. FBT on accommodation, food and transport – Fly-in and Fly-out etc.
  5. FBT on benefits to protect employees from COVID-19
  6. FBT and emergency health care
  7. FBT and providing the flu vaccination to employees who are working from home
  8. FBT and providing testing for COVID-19 to employees
  9. Super guarantee obligations – inability to pay
  10. Super guarantee obligations – employees temporarily overseas
  11. Super guarantee obligations – employee temporarily working in Australia
  12. Super guarantee obligations – departure of employee who was temporarily in Australia

The relevant ATO page remains active, as appears from the material added in May 2020. Readers may find it useful to revisit the page from time to time during the period that COVID affects business and commercial decisions.

 

Question Answer
Not-for-profit employers and salary packaging I am a not-for-profit employer and I provide salary-packaged meal entertainment to my employees. Can my employees use their exempt (or rebatable) cap during the FBT year ending 31 March 2021 given restaurants and public venues are currently closed due to COVID-19? Whether the provision of meals qualifies as salary-packaged meal entertainment depends on the particular facts and circumstances of the meal and how it is provided. Given the unprecedented circumstances currently existing, for the FBT year ending 31 March 2021, we will not apply any compliance resources to scrutinising expenditure under these arrangements provided the meals are provided by a supplier that was authorised as a meal entertainment provider as at 1 March 2020. We also confirm that for the FBT year ended 31 March 2020, we will not apply any compliance resources to scrutinising expenditure under these arrangements during the period where restaurants and public venues were closed. This question was last updated on 17 April 2020.  
FBT and working from home Will I need to pay FBT if I provide an employee with items to allow them to work from home due to COVID-19? If you provide your employees with a laptop and a portable printer or other portable electronic devices to enable them to work from home or from another location due to COVID-19, these will usually be exempt from FBT if they are primarily used for your employee’s employment. If you allow your employee to use a monitor, mouse or keyboard they otherwise use in the workplace, or if you provide them with stationery or computer consumables or pay for their phone and internet access, the minor benefits exemption or the otherwise deductible rule may apply. The minor benefits exemption may apply for minor, infrequent and irregular benefits of less than $300. The otherwise deductible rule allows you to reduce the taxable value of benefits by the amount for which your employee would be able to claim a once-only deduction. This question was last updated on 9 April 2020.  
FBT on accommodation, food and transport – emergency Will I need to pay FBT if I provide an employee adversely affected by COVID-19 with emergency accommodation, food, transport or other assistance?  No, so long as both of the following apply:
  • The benefit given to your employee is emergency assistance to provide immediate relief.
  • That employee is, or is at risk of being, adversely affected by COVID-19.
In the context of COVID-19, we will accept that the FBT emergency assistance exemption applies if you, as an employer, have provided emergency accommodation, food, transport or other assistance to an affected employee. Exempt assistance would cover, for example:
  • expenses incurred relocating an affected employee due to COVID-19, including paying for flights for overseas to return to Australia
  • expenses incurred providing food and temporary accommodation if an affected employee is unable to travel due to travel restrictions (including domestic, interstate or intrastate travel)
  • benefits provided that allow the affected employee to self-isolate or be quarantined
  • transporting or paying for an affected employee’s transport expenses including car hire and transport to temporary accommodation.
This question was last updated on 9 April 2020.
FBT on accommodation, food and transport – Fly-in and Fly-out etc. My employees work on a fly-in fly-out and a drive-in drive-out basis. With the travel restrictions arising from COVID-19, some are not able to return to their normal residence on the days they aren’t working. I’m paying for their temporary accommodation and meals while they can’t return home. Do I have to pay FBT for the accommodation and meals I am providing? No, you won’t have to pay FBT for the temporary accommodation and meals provided to your employees who are unable to return to their normal residence due to domestic and international travel restrictions in response to COVID-19. These benefits are considered emergency assistance and are exempt from FBT. This question was last updated on 9 April 2020.
FBT on benefits to protect employees from COVID-19 If I give my employees gloves, face masks, sanitisers and anti-bacterial spray to protect them from contracting COVID-19 while at work, do I need to pay FBT on these benefits? It depends. These benefits will be exempt from FBT under the emergency assistance exemption if you provide them to your employees to carry out their duties that require them to have physical contact or be in close proximity to customers or clients while carrying out their duties or they are involved in cleaning premises. Examples of this type of work include the:
  • medical industry (such as doctors, nurses, dentists and allied health workers)
  • cleaning industry
  • airline industry
  • hairdressing and beautician industry
  • retail, café and restaurant industry.
If your employees’ specific employment duties are not of the kind described above, the minor benefits exemption may apply if you provide an employee with minor, infrequent and irregular benefits of less than $300. This question was last updated on 9 April 2020.
FBT and emergency health care Will I need to pay FBT if I provide emergency health care to an employee affected by COVID-19? Exemptions from FBT for emergency health care is limited. They only apply to health care treatment provided:
  • by an employee of yours (or an employee of a related company)
  • on your premises (or premises of the related company)
  • at or adjacent to an employee’s worksite.
If you pay for your employee’s ongoing medical or hospital expenses, FBT applies. However, if you pay for transporting your employee from the workplace to seek medical assistance, the cost is exempt from FBT. This question was last updated on 17 March 2020.
FBT and providing the flu vaccination to employees who are working from home My employees are unable to get the influenza vaccine at the workplace as they are working from home due to COVID-19. Will I need to pay FBT if I provide my employees with a voucher or reimbursement for getting the flu vaccine from a GP or chemist? No, you won’t have to pay FBT on a voucher or reimbursement for the costs of an employee’s flu vaccine from a GP or chemist, as long as it is available generally to all employees. Providing a flu vaccination to employees is exempt from FBT as it is the provision of work-related preventative health care. It does not matter that you cannot provide the flu vaccine at the workplace because some or all of your employees are working from home due to COVID-19. If only some of your employees choose to receive the flu vaccine at the GP or chemist, the voucher or reimbursement will still be exempt from FBT, as long as you offered it to all employees This question was last updated on 8 May 2020.
FBT and providing testing for COVID-19 to employees Will I need to pay FBT if I provide testing for COVID-19 to my employees prior to them entering the workplace? No, you won’t have to pay FBT on the provision of COVID-19 testing for your employees prior to them entering the workplace, as long as the testing is carried out by a legally qualified medical practitioner or nurse and is made available generally to all employees. The provision of this test will be exempt from FBT as it is work-related medical screening, due to the highly infectious nature of COVID-19, and that any employee is equally susceptible to contracting the virus. If only some of your employees are provided with COVID-19 tests, the tests will still be exempt as long as you offered them to all employees. This question was last updated on 8 May 2020.
Super guarantee obligations – inability to pay I can’t afford to pay my employee’s super guarantee contributions by the due date because of COVID-19. What do I need to do?  Legally, we can’t extend the due date to pay the super guarantee contributions for your employees. Pay as much as you can by the due date, even if you can’t pay in full. This will reduce the super guarantee charge. If you didn’t pay the full super guarantee by the due date:
  • lodge a Super guarantee charge statement
  • pay the charge to us.
If you do this within the month, there will be no penalties. Interest will still apply. If you have trouble paying the super guarantee charge, we can work with you to set up a payment arrangement – see Pay in full or set up a payment plan. This question was last updated on 20 March 2020.
Super guarantee obligations – employees temporarily overseas My employees are temporarily working overseas because of COVID-19. Does this affect my super guarantee obligations? If your employees usually live and work in Australia and are only temporarily working overseas, there is no change to your pay as you go (PAYG) withholding, FBT and super guarantee obligations. The situation may be more complicated if your employee ends up staying overseas for a lengthy period. We encourage you to first consider our existing advice on these issues. If you are unsure of the effect in your circumstances contact us for further guidance. This question was last updated on 20 March 2020.
Super guarantee obligations – employee temporarily working in Australia I’m an Australian employer and my employee is not an Australian resident. They are working in Australia temporarily as a displaced employee because of COVID-19. What are my employer obligations? In most cases, you have the same kind of tax obligations for all employees you have working in Australia. This includes PAYG withholding, FBT and super guarantee. The same withholding rules apply to both your domestic employees and your displaced foreign employees. Regarding foreign employees, some of these employees will not have an Australian tax liability on their employment income earned while in Australia (see Not an Australian resident, temporarily in Australia). If this is the case, there are no PAYG withholding obligations. We understand in the current environment you may have a larger workforce temporarily situated in Australia because of COVID-19. However it is important to ensure that your displaced foreign employees are supported in the same manner as your domestic staff. We are happy to work with you in setting up to meet your obligations to displaced employees. This question was last updated on 20 March 2020.
Super guarantee obligations – departure of employee who was temporarily in Australia My employee was temporarily working in Australia because of COVID-19 and I paid superannuation on their behalf. When they leave Australia can they withdraw that super? When the employee leaves Australia permanently, they may withdraw any superannuation you paid on their behalf while they were displaced (subject to eligibility requirements and tax). Generally your employee can claim a Departing Australia Superannuation Payment (DASP) if the following apply:
  • They accumulated superannuation while working in Australia on a temporary resident visa issued under the Migration Act 1958 (excluding Subclasses 405 and 410).
  • Their visa has ceased to be in effect (for example, it has expired or been cancelled).
  • They have left Australia.
  • They are not an Australian or New Zealand citizen, or a permanent resident of Australia.
This question was last updated on 20 March 2020.

 

 

This article provides a general summary of the subject covered and cannot be relied upon in relation to any specific instance. It is not intended to be, nor should it be relied upon as, a substitute for professional advice. TaxEd Pty Ltd and any person connected with its production disclaim any liability in connection with any use.

This article provides a general summary of the subject covered and cannot be relied upon in relation to any specific instance. It is not intended to be, nor should it be relied upon as, a substitute for professional advice. TaxEd Pty Ltd and any person connected with its production disclaim any liability in connection with any use.