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FBT on reimbursement for study which is “Commonwealth Supported”.

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We are a local government organisation and considered not for profit entity.  We have a FBT question in relation to our study fee reimbursement to our employees. As per our policy, Employees will be reimbursed for fees that have been paid up front.  I have a request for reimbursement for study that is “Commonwealth Supported”.  I want to ask implication of FBT on this reibmursement which employer is paying to its employee for commonwelath supported studies.

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Hi @khushwantkc2002,

 

Thanks for your patience.

 

Where you are reimbursing the employees student contributed amount than the benefit is considered an ‘expense payment fringe benefit.’


The taxable value can be reduced if the employee was able to claim a self-education deduction if you hadn’t reimbursed them. This is known as the ‘otherwise deductible rule’.


Therefore, if an employee would be entitled to an income tax deduction for the upfront payment of tuition fees then you would be able to apply the ‘otherwise deductible rule’ to reduce the taxable value of the 'expense payment fringe benefit`


Check out Expense payment fringe benefits –a guide for employers.

 

Thanks

 

KylieS

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Hi @khushwantkc2002,

 

You've posted a great question!

 

We've asked our technical experts to look into this and we'll get back to you as soon as possible.

 

Thanks, NicM.

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ATO Certified

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Hi @khushwantkc2002,

 

Thanks for your patience.

 

Where you are reimbursing the employees student contributed amount than the benefit is considered an ‘expense payment fringe benefit.’


The taxable value can be reduced if the employee was able to claim a self-education deduction if you hadn’t reimbursed them. This is known as the ‘otherwise deductible rule’.


Therefore, if an employee would be entitled to an income tax deduction for the upfront payment of tuition fees then you would be able to apply the ‘otherwise deductible rule’ to reduce the taxable value of the 'expense payment fringe benefit`


Check out Expense payment fringe benefits –a guide for employers.

 

Thanks

 

KylieS

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