Can takeaway food be treated as ‘meal entertainment’?

For certain not-for-profit (‘NFP’) employers, there is, in addition to the standard $30,000 or $17,000 FBT exemption or rebate cap a further grossed-up cap of $5,000 for salary packaged meal entertainment. It is common in many NFP sectors (e.g. healthcare, PBI’s etc) for employers to allow salary packaging of meal entertainment up to the $5,000 …

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Member Q&A – Can child support payments be salary packaged?

Question Can an employee salary package child support payments? Answer The rules regarding salary packaging are set out in Taxation Ruling TR 2001/10 and are summarized on the ATO website (click here) Subject to the usual rules being satisfied regarding what constitutes an ‘effective salary sacrifice agreement’ an employee’s child support obligations can be included …

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Member Q&A – Can you salary sacrifice the cost of a laptop computer bag with no FBT payable?

Question We offer salary packaging on electronic devices providing certain conditions are met, the main condition being that the device is principally used for work purposes. In the case of laptop computers, often the staff member will purchase a laptop bag at or around the same time that they acquire the laptop. Can the cost …

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Salary packaging – Salary sacrifice of accrued leave

Timing is crucial when it comes to salary sacrificing leave entitlements. The Commissioner’s view on the taxation implications of salary sacrifice arrangements is discussed in Taxation Ruling TR 2001/10. A salary sacrifice arrangement is an arrangement between an employer and an employee whereby the employee agrees to forgo part of their future entitlement to remuneration …

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Salary Packaging Q&A – Councillor access to salary packaging

Can a councillor salary package amounts otherwise due? Question Can a Councillor salary package amounts otherwise due from Council and instead receive use of a Council provided car (in a novated lease scenario)? Answer The simple answer is ‘yes”. However there are some important conditions that apply and it is useful to understand why salary …

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Salary Packaging – Structuring salary packaging arrangements: Dealing with luxury car adjustments

It is important to structure salary sacrificing arrangements to be beneficial to both the employer and employee. This often involves the employer passing on costs associated with providing the benefit. One of these costs is the luxury car adjustment. This article discusses whether this adjustment is relevant to income tax exempt employers and whether the …

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Salary Packaging – Novated leases: Trade-ins and cash contributions towards cost of car

Can an employee vehicle trade-in, or cash payment, contributed towards the acquisition of a car through a novated leased reduce the employer’s FBT base value? This is a common question but may have an unexpected outcome for employers. The provision of a car to an employee through novated lease financing is a widely used as …

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Salary Packaging and FBT – Timing issues of employee contributions and the effect of a journal entry

Do you offer salary sacrifice arrangements to your employees? This article discusses the timing issues that you need to consider where an employee is required to contribute towards the costs of non-cash benefits provided under an effective salary sacrifice arrangement. Effective salary sacrifice arrangements Most organisations offer salary sacrifice arrangements as part of remuneration packaging …

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Salary Packaging Q&A – Refunding after-tax contributions from ceased salary packaging arrangement

Our employee is ceasing their salary packaging arrangement and has excess after-tax contributions. If we refund these contributions, will they be subject to PAYG withholding? Alternatively, can we hold the excess contributions for use in a later FBT year? Question We have an employee who is ceasing his salary packaging arrangement (novated lease vehicle) and …

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General Article – E-invoicing, not electronic invoicing – there is a difference

Money flows out under digital process such as Single Touch Payroll (STP) – what if money could flow in through a digital process? E-Invoicing (a step beyond electronic invoicing) is coming. Readers will be aware that for many businesses, money has been flowing out through a fully digitised process under the STP regime for some …

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