Hi, My employer salary sacrificing partner has just informed me that I'm not eligible for salary sacrificing (after a year) and is passing on the full FBT liability. Is this possible as it is a lot more than the tax benefit I would have received. Or should the FBT transactions be reversed and I pay the tax I should have incurred?
Hi @Kezza,
Your employer can pass on the FBT to you only if it was agreed in your salary sacrifice arrangement.
For the arrangement to be effective, it must have:
If the salary sacrifice arrangement wasn't effective (for example, if it didn't meet the requirements), the benefits you received should be treated as assessable income instead. In this case, you'd pay tax on the benefits as normal income, and the arrangement should be unwound rather than having FBT passed on to you.
The amount of FBT your employer calculates depends on the type of benefit and its taxable value. When an employer passes FBT costs to employees, they often ask for employee contributions to reduce the FBT they have to pay. But if the FBT they’re passing on is more than the tax benefit you received, it could mean the arrangement wasn’t set up or valued correctly.
It's worth discussing this with your employer's salary sacrificing partner to understand why the arrangement is no longer considered eligible after a year and ask them to explain:
If you can't resolve this with your employer, you may want contact Fair Work to check whether the employer is allowed to take the money from your pay, seek independent financial or tax advice about your specific situation and whether the FBT liability being passed on is correct.
Hi @Kezza,
Your employer can pass on the FBT to you only if it was agreed in your salary sacrifice arrangement.
For the arrangement to be effective, it must have:
If the salary sacrifice arrangement wasn't effective (for example, if it didn't meet the requirements), the benefits you received should be treated as assessable income instead. In this case, you'd pay tax on the benefits as normal income, and the arrangement should be unwound rather than having FBT passed on to you.
The amount of FBT your employer calculates depends on the type of benefit and its taxable value. When an employer passes FBT costs to employees, they often ask for employee contributions to reduce the FBT they have to pay. But if the FBT they’re passing on is more than the tax benefit you received, it could mean the arrangement wasn’t set up or valued correctly.
It's worth discussing this with your employer's salary sacrificing partner to understand why the arrangement is no longer considered eligible after a year and ask them to explain:
If you can't resolve this with your employer, you may want contact Fair Work to check whether the employer is allowed to take the money from your pay, seek independent financial or tax advice about your specific situation and whether the FBT liability being passed on is correct.
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