Mobile plan device provided to staff on termination

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(Newbie)Newbie

4 June 2021

Hi,

We have an employee who was porvided a Mobile for work purposes under the corporate plan and the device cost was paid monthly with the bill by the company. (Invoiced direclty to the comany) .As the mobile is an exempt item the bill is also exempt under section s58X. The employee was given the mobile device back in mid 2019 under the mobile plan and the company is still making installment payments for it.

This employee will be leaving the company soon and therefore we have adviced him to move the phone number to private when he leave and that he can keep the mobile device at no cost to him. But we might be required to pay the Mobile company total balance installment fees for this handset device when he leaves.

Could you please advice the tax implication (if any) on the abvoe scenario?

Thanks

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KylieATO

(Community Support)Community Support

13 June 2021

Hi @Sash1183

From an FBT perspective this would mean that the phone was provided as an exempt benefit at that time (provided work related usage requirements were met). Where there are usage fees payable later they would continue to be exempt while the employee remained in the employ of the employer.

Provided no part of the payment relates to a period after the termination of employment there would generally be no FBT consequence for this payment.