I am an employee to my company. I am trying to decide whether I or my company should pay for my (a) professional indemnity insurance (b) aphra registration (c) professional membership fees. I assume my company can pay for such and so claim expenses, however, would then my company be liable to fringe benefits tax.
Hi @faigey
You’re right in thinking as an employee, the company would be liable to FBT if they were to pay the personal expenses you mentioned
If you were to pay them yourself, you can claim a work-related deduction providing the expense relates to your income earning activities as an employee.
In our legal database there’s a Fringe benefits tax – a guide for employers you may find helpful as the employer.
Hi @faigey
You’re right in thinking as an employee, the company would be liable to FBT if they were to pay the personal expenses you mentioned
If you were to pay them yourself, you can claim a work-related deduction providing the expense relates to your income earning activities as an employee.
In our legal database there’s a Fringe benefits tax – a guide for employers you may find helpful as the employer.
Hi AlliATO,
Thanks for taking the trouble to get back to me.
I did read the following
Providing benefits that would be deductible for the employee.
You do not incur an FBT liability if you give an employee a benefit they would have been
able to claim as an income tax deduction if they themselves had paid for it. This is called
the 'otherwise deductible' rule.
So my understanding/interpretation is that it really does not matter whether either (a) the company or (b) the employee claims these expenses? NOT both.
For your comments please.
Hi @faigey,
You're spot on!
If both the employer and employee were to claim the expense it would be 'double dipping'. This is best avoided.
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