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Re: the tax implications of "Get Your COVID-19 Vaccine, Get USD$250"

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Last week, CEO  announced the group's approach to the COVID-19 vaccine. The company will not require employees to take the vaccine, but it is strongly encouraged to help keep everyone safe and healthy.  Employees who provide proof that they got the vaccine will receive $250 [USD] or their local currency equivalent.  

 

as this announcement was made on February 6,2021, the exchange rate was 0.7593, so the AUD equivalent would be 329.25, each employee in Australia who are eligible will receive the cash incentive.

 

my question is from employer's perspective, is this incentive a fringe benefit or bonus hence taxable income for employees, as the intention is for each empoyee to get a 329.25 cash in the pocket, if it's income taxable, the employer needs to gross it up at each employee's marginal tax rate.

 

 

 

 

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ATO Community Support

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Hi @taxdummy69

 

Wow, what an incentive to get vaccinated!

 

It won't be a fringe benefit, since it doesn't fit into any of our fringe benefit categories.

 

It will be seen as a bonus. It won't be superable, since it isn't an ordinary time earning (that is, earned in the course of work). This means PAYG withholding will apply. The payment will need to be taxed according to the Tax table for bonuses.

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ATO Certified Response

ATO Community Support

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Hi @taxdummy69

 

Wow, what an incentive to get vaccinated!

 

It won't be a fringe benefit, since it doesn't fit into any of our fringe benefit categories.

 

It will be seen as a bonus. It won't be superable, since it isn't an ordinary time earning (that is, earned in the course of work). This means PAYG withholding will apply. The payment will need to be taxed according to the Tax table for bonuses.

Newbie

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Thanks very much for your reply, from the administration point of view, TGA has given businesses green light.

 

Businesses get green light to offer rewards to people who receive their COVID jab (sbs.com.au)

 

Rewards programs for coronavirus vaccinations have been given approval by the Therapeutic Goods Administration.

 

do you think ATO will issue a ruling to make the reward/incentive an exempt income in the near future?

 

Thank you

Community Moderator

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Hi @taxdummy69,

 

We aren't aware of anything in the pipeline but if it happens it will be available on our website.