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Monique123(Newbie)Newbie
27 Jan 2023

I work for QLD Health so my employer is exempt under section 57A of the FBTAA 1986.

I salary sacrifice pretax earnings up to my cap. My partner salary sacrifices pretax earnings into his Superannuation, but his employer is not exempt from FBT.

My question is in relation to the Income for Medicare levy surcharge (MLS).

I understand that they will use our combined taxable income plus my partners non-exempt fringe benefit to calculate our income for MLS purposes.

Will they also count my exempt Fringe Benefits as part of our combined income for MLS purposes?

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PayrollDeanne(Taxicorn)Taxicorn
28 Jan 2023

Hiya @Monique123


Yes, because the "exempt/not exempt" refers to the payer's FBT liability, not the RFBA. That is, those benefits QH provide to you for work you do in performing "exempt" duties reduces their overall FBT liability to the ATO.


RFBA, on the other hand, refers to the grossed-up value of the benefits you received (the non-cash component of your remuneration). The ATO has excellent guidance to explain how they use RFBA.


However, for exempt RFBA, only 53% of the value is taken into consideration for family benefits and youth income support payments as per this ATO guidance.


I hope that helps - Deanne

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Most helpful reply

PayrollDeanne(Taxicorn)Taxicorn
28 Jan 2023

Hiya @Monique123


Yes, because the "exempt/not exempt" refers to the payer's FBT liability, not the RFBA. That is, those benefits QH provide to you for work you do in performing "exempt" duties reduces their overall FBT liability to the ATO.


RFBA, on the other hand, refers to the grossed-up value of the benefits you received (the non-cash component of your remuneration). The ATO has excellent guidance to explain how they use RFBA.


However, for exempt RFBA, only 53% of the value is taken into consideration for family benefits and youth income support payments as per this ATO guidance.


I hope that helps - Deanne

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My employer is exempt from FBT under section 57A, will my Exempt Fringe Benefits affect MLS | ATO Community