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hskyu91(Initiate)Initiate
15 July 2022

Here is the situation -

As it is hard for two new full time employees from overseas/different state to find a rent in WA, employer decided to rent the two room house ($500/week), and made an agreement with employees that they will pay $250/week for each room, which means there is no benefit from renting a house.

There is a consent between employer and employee that wage will be paid after deduction of rent payable each week ($250/week).


In this case, I have some questions -

1. Can employer basically deduct rent fee from employee's wage?

2. Can it be pre tax deduction? (Can we call above thing as salary sacrifice?)

3. Is there any FBT issue even if there is no benefit from renting house for both parties? (and what if, suddenly only one employee is living in that house - who only pays $250 per week for one room, but employer keep needs to pay $500 for entire house rent.)

4. Any eligibility is required to deduct rent expense from employee's wage?


10,660 views
2 replies
10,660 views
2 replies

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Most helpful replyATO Certified Response

CaroATO(Community Support)Community Support
ATO Certified Response19 July 2022

Hi @hskyu91,


You'd need to meet certain conditions before you can deduct from an employee's wage.


It's possible to salary sacrifice rent for an employee.


There is a housing fringe benefit where the employer provides an employee a place to live either rent-free or at a lesser amount. The amount of FBT an employer will pay at any time will be $500. It doesn't matter if it's split between 1 or 2 employees.


The Fair Work Ombudsman web site outlines the conditions of taking money out of an employee's pay.


Check out the information on our web site that talks about housing fringe benefits and salary sacrifice arrangements.

All replies

Most helpful replyATO Certified Response

CaroATO(Community Support)Community Support
ATO Certified Response19 July 2022

Hi @hskyu91,


You'd need to meet certain conditions before you can deduct from an employee's wage.


It's possible to salary sacrifice rent for an employee.


There is a housing fringe benefit where the employer provides an employee a place to live either rent-free or at a lesser amount. The amount of FBT an employer will pay at any time will be $500. It doesn't matter if it's split between 1 or 2 employees.


The Fair Work Ombudsman web site outlines the conditions of taking money out of an employee's pay.


Check out the information on our web site that talks about housing fringe benefits and salary sacrifice arrangements.

hskyu91(Initiate)Initiate
25 July 2022

Thanks for your kind answer and information.

I have a few questions after I checked relevant information as follows -

  1. So with above case, If employer rent a house to employee with exact same value ($500/week), there will be no FBT occurred, right?
  2. If all circumstances are met, and employee agrees to be paid its wage after deduction of rent, Can it be pre tax deduction (i.e. employee's gross wage is lowered)?
  3. And one last question is, what happens if Employer rent a house $500/week and employee pay back $510/week for rent to Employer as rent deduction from their wage? Is this profit reported as income?

Thank you very much.

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Can rent deduction be salary sacrifice, and does it require for FBT reporting? | ATO Community