Section 58X of the Fringe Benefits Tax Assessment Act 1986 (‘FBT Act’) provides exemption for eligible work related items provided to employees primarily for use in their employment duties.
In practice, section 58X provides FBT exemption for items like laptops and mobile phones, but with advances in technology many other items now potentially fit within the exemption. Whether an eligible work related item is exempt under section 58X is tested when the benefit is provided based on why it is provided (i.e., primarily for use in the employee’s employment). The current legislation also includes a restriction limiting the exemption where items that have substantially identical functions to have previously been provided to an employee in the same FBT year. Ongoing use of the item once the benefit has been provided does not determine/alter the FBT treatment nor does private use prevent full exemption.In practice, section 58X provides FBT exemption for items like laptops and mobile phones, but with advances in technology many other items now potentially fit within the exemption. Whether an eligible work related item is exempt under section 58X is tested when the benefit is provided based on why it is provided (i.e., primarily for use in the employee’s employment). Ongoing use of the item once the benefit has been provided does not determine/alter the FBT treatment nor does private use prevent full exemption.
The current legislation also denies exemption where an item that has substantially identical functions to have previously been provided to an employee in the same FBT year (carve outs exist where the item is a replacement or a portable electronic device provided by a ‘small business entity’).
The provision of the benefit can be by way of an expense payment fringe benefit (e.g. employer reimburses cost) or a property fringe benefit (employer buys and gives item to employees) or residual benefit (employer permits use of item). And as section 58X is currently set, there is nothing to prevent a benefit being provided under a salary packaging arrangement.
Despite employers perhaps not wanting to “fund” such products, the nexus to better performance of an employee’s employment duties justified employers permitting access via salary packaging arrangements which has made the use of section 58X in salary sacrifice scenarios increasingly popular. Take a portable electronic device for example, which is one of the sub-categories of eligible work related items. The following items have been accepted by the ATO (ATO references provided) as eligible work related items:
Included in the Instant tax deduction – exposure draft released on 20 April 2026 (re the $1,000 instant tax deduction) is a proposed amendment of section 58X, in summary:
As a result, while the proposed amendment would make section 58X somewhat more accessible to employers to provide multiple eligible work related items of substantially identical functionality to employees in the same FBT year, it spells the end of section 58X being in salary packaging arrangements .
The change (if legislated) is intended to take effect from 1 April 2027.
Other changes will also be made to the FBT Act as part of the $1,000 instant tax deduction measure aimed at ensuring no double dipping occurs (e.g. a tax deduction claimed and no FBT payable under otherwise deductible expense payment fringe benefit rules).
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