Hi,
Employee will receive a Fixed Rate Ancillary payment ($350 per round trip) as reimbursement for the cost of standard taxi, bus, train or private vehicle and parking. We called it Ground Transportation Allowance to cover the cost between the Point of Engagement and the Usual Place of Residence. Will this allowance subject to Tax and Super?
Hi @Zulkarnain
You’ve mentioned reimbursement but called it an allowance, you’ll need to work out which one it is.
Did the employee pay for the expense first and you paid them back? If so, this is a reimbursement not an allowance.
Reimbursements are a payment you make to your employee for actual expenses already incurred, you may be subject to fringe benefits tax (FBT).
If the reimbursement is covered by FBT, the amount is not assessable income to the employee, they wouldn’t be able to claim a deduction for the expense.
Allowances are separately identified payments paid due to working conditions, qualifications or special duties, expenses that can’t be claimed as a tax deduction by the employee or work-related expenses that may be claimed as a tax deduction by the employee, such as travel between work sites.
Super obligations do not apply to expense allowances or reimbursements as they are not salary or wages, they are not ordinary time earnings.
Our Allowances and reimbursements page may help you as well.
Hi @Zulkarnain
You’ve mentioned reimbursement but called it an allowance, you’ll need to work out which one it is.
Did the employee pay for the expense first and you paid them back? If so, this is a reimbursement not an allowance.
Reimbursements are a payment you make to your employee for actual expenses already incurred, you may be subject to fringe benefits tax (FBT).
If the reimbursement is covered by FBT, the amount is not assessable income to the employee, they wouldn’t be able to claim a deduction for the expense.
Allowances are separately identified payments paid due to working conditions, qualifications or special duties, expenses that can’t be claimed as a tax deduction by the employee or work-related expenses that may be claimed as a tax deduction by the employee, such as travel between work sites.
Super obligations do not apply to expense allowances or reimbursements as they are not salary or wages, they are not ordinary time earnings.
Our Allowances and reimbursements page may help you as well.
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