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Re: Allowance for Intern

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Hi,

 

Our organisation has one Intern (who is a full time student) that comes in once a week. It is an unpaid internshi, however we are providing her with an allowance for food and travel. What are the tax implications of this for us as an organisation?

 

Will I record the expense as "internship Allowance Expense", if so is it GST on expense/GST free expense or BAS Excluded?

 

Thank You

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ATO Certified Response

ATO Community Support

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Hi @MillietheCat

 

You'll need to, for tax purposes, treat the intern as a full employee.

 

This means you'll need to have her complete a TFN declaration. You'll need to apply the correct withholding from her allowances. You can do this by using our tax tables. You'll need to report her payments through STP-enabled software, and finalise her income statement at the end of the year like any other employee.

 

As an employer, you can claim a deduction for employee payments such as salary and wages (including allowances).

 

There may be state or territory payroll tax implications, but you'll need to check with them directly for that.

 

You may also want to check with Fair Work that the unpaid internship meets their requirements for unpaid internships, just to be sure! Smiley Happy

 

You can access tax tables and information about deduction for workers' salaries and so on on our website.

1 REPLY 1

Most helpful response

ATO Certified Response

ATO Community Support

Replies 0

Hi @MillietheCat

 

You'll need to, for tax purposes, treat the intern as a full employee.

 

This means you'll need to have her complete a TFN declaration. You'll need to apply the correct withholding from her allowances. You can do this by using our tax tables. You'll need to report her payments through STP-enabled software, and finalise her income statement at the end of the year like any other employee.

 

As an employer, you can claim a deduction for employee payments such as salary and wages (including allowances).

 

There may be state or territory payroll tax implications, but you'll need to check with them directly for that.

 

You may also want to check with Fair Work that the unpaid internship meets their requirements for unpaid internships, just to be sure! Smiley Happy

 

You can access tax tables and information about deduction for workers' salaries and so on on our website.