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Allowances

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Newbie

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I have employees asking for allowances for the following:

chef: $100/week for purchasing equipment & food to menu test

Maintenance: tools allowance (business does supply tools)

Admin staff: allowance for using their own laptop and internet when working from home.

 

Should these items be allowances? If so, how are they treated in terms of withholding tax, super, FBT.

Should the staff simply just claim these expenses themselves in their tax return?

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Best answer

Champion

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HI @TS2 

 

With the Chef, it's more likely that you'd be reimbursing any expenses that they are saying that pay out of pocket - get them to provide you with the receipts - not an allowance.

Maintenance - in most cases the allowances stipulated in the awards for these jobs is based on them providing their own tools in order to be given an allowance - you say you provide the tools, no allowance.

Admin Staff, there's no allowance for using laptop or internet from home for most admin roles (check the award), providing one would likely be seen as a fringe benefit. They could operate as a sole-trader from home and then claim X% as a business expense, but that's on them.

2 REPLIES 2
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Best answer

Champion

Replies 0

HI @TS2 

 

With the Chef, it's more likely that you'd be reimbursing any expenses that they are saying that pay out of pocket - get them to provide you with the receipts - not an allowance.

Maintenance - in most cases the allowances stipulated in the awards for these jobs is based on them providing their own tools in order to be given an allowance - you say you provide the tools, no allowance.

Admin Staff, there's no allowance for using laptop or internet from home for most admin roles (check the award), providing one would likely be seen as a fringe benefit. They could operate as a sole-trader from home and then claim X% as a business expense, but that's on them.

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ATO Certified

Community Support

Replies 0

Hi @TS2,

 

Thanks for your question!

 

In addition to the information provided by @ariellead, you might find the following details helpful.

 

If you do decide to provide allowances to your employees, you can see how the withholding would be applied here.

 

Reimbursements made to your employees may require you to register for Fringe Benefits Tax, if you are not already registered.

 

Superannuation obligations do not apply to expense allowances and reimbursements, as these are not defined as salary or wages.

 

Your employees can still claim a deduction for eligible work related expenses, even if they have not received an allowance for those expenses. If they were reimbursed for the expenses, then they would not be able to claim a deduction for those expenses.

 

Hope this helps,

 

Rachael B.