ATO Community

Re: Donations to employees affected by fires

Ask a question

I'm new

Views 148

Replies 2

We want to gift $1,500 to a few staff that have lost their homes as a result of the recent bushfires.  We don't want to disadvantage the person in terms of any govt benefits they receive, we do not want to create a liability for FBT nor do we want to cause an income tax liability for them.  Is there a particular way to donate the money to them to create the greatest benefit possible?  eg. does the money need to be restricted in use (only for food, essential supplies).  We are a charity and have DGR status.  

1 ACCEPTED SOLUTION

Accepted Solutions
Highlighted

Best answer

ATO Certified

Community Manager

Replies 0

Hi @leannefield6,

 

We’re sorry for the delay in getting back to you and want to thank you for your patience.

 

We’ve checked in with the experts who confirmed assistance payments to individuals from charities are generally not taxable given that payments are made voluntarily and there’s no right or entitlement to the payment. Similarly, emergency assistance from an employer to an employee (for example, one-off and other non-periodic emergency relief payments) is not taxable.

 

Charities can make gifts to their employees without creating an income tax or FBT liability as long as the gift is consistent with their charitable purpose. For example, a charity established to provide care and re homing of animals can’t make a gift to it’s employees.

 

As you’re a charity with DGR status, any gifts made to employees must also be consistent with any special conditions attached to the particular DGR category you’re endorsed under.

 

You can find more information about Disaster Assistance Payments on our website. If you’d like to speak to someone further you can email us at atoendorsements@ato.gov.au or contact the Non for profit area directly.

 

KylieS

 

2 REPLIES 2

Community Manager

Replies 0

Hi @leannefield6,

 

Let me check into it for you.

 

KylieS

Highlighted

Best answer

ATO Certified

Community Manager

Replies 0

Hi @leannefield6,

 

We’re sorry for the delay in getting back to you and want to thank you for your patience.

 

We’ve checked in with the experts who confirmed assistance payments to individuals from charities are generally not taxable given that payments are made voluntarily and there’s no right or entitlement to the payment. Similarly, emergency assistance from an employer to an employee (for example, one-off and other non-periodic emergency relief payments) is not taxable.

 

Charities can make gifts to their employees without creating an income tax or FBT liability as long as the gift is consistent with their charitable purpose. For example, a charity established to provide care and re homing of animals can’t make a gift to it’s employees.

 

As you’re a charity with DGR status, any gifts made to employees must also be consistent with any special conditions attached to the particular DGR category you’re endorsed under.

 

You can find more information about Disaster Assistance Payments on our website. If you’d like to speak to someone further you can email us at atoendorsements@ato.gov.au or contact the Non for profit area directly.

 

KylieS

 

Top Solution Authors