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Long service award 10 years

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Newbie

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If we give an employee a $1000 gift card as an award for 10 years service (they did not receive any other long service award previously), what is the taxable amount for FBT purposes?

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Devotee

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See the rules under s58Q of the FBTAA 1986.

 

The exemption limit is set as follows:

$1,000 + ($100 × (RLS − 15))

RLS is the number of whole years of service so essentially the exemption is $1,000 for the first 15 whole years of service plus $100 for each additional whole year of service after that.

 

The FBT amount is only exempt if the amount does not exceed the amount calculated. 

 

Based on my reading of the rules, the practical application would be:

Pay him $500 as a recognition of long service (treated as exempt benefit) and $500 as anything other than recognition of long service (subject to FBT).

1 REPLY 1
Highlighted

Best answer

Devotee

Replies 0

See the rules under s58Q of the FBTAA 1986.

 

The exemption limit is set as follows:

$1,000 + ($100 × (RLS − 15))

RLS is the number of whole years of service so essentially the exemption is $1,000 for the first 15 whole years of service plus $100 for each additional whole year of service after that.

 

The FBT amount is only exempt if the amount does not exceed the amount calculated. 

 

Based on my reading of the rules, the practical application would be:

Pay him $500 as a recognition of long service (treated as exempt benefit) and $500 as anything other than recognition of long service (subject to FBT).