Are fringe benefits included as purchases at G11, or are they considered a part of salary and...

[#1]

For example, if an employer pays the private health insurance premium of one of their employees as a part of their salary package, is this considered to form part of their salary for the purposes of BAS, or should it be shown as a non-capital acquisition in G11?

Thanks for the help!

Jon

[#2 · Accepted solution]

Hi @WeirderQuark,

Thanks for your question!

Paying an employee's private health insurance is generally classified as a Fringe Benefit. This requires a separate registration and has additional reporting obligations. Fringe Benefits amounts do not get reported under GST labels.

Hope this helps,

Rachael B.

[#3]

Hi Rachel,

Thanks for your reply. I see on this ATO web page 

https://www.ato.gov.au/law/view/document?DocID=SAV%2FFBTGEMP%2F00002

under section 1.6 that:

"You are entitled to GST credits for acquisitions made to provide fringe benefits if you are registered or required to be registered for GST. "

If fringe benefits are not reported on the BAS, and as I see no mention of GST on the FBT return form, how would you be able to get GST back on fringe benefits purchases?

Thanks,

Jon

[#4]

Hi @WeirderQuark,

Thanks for your reply!

If you are already registered and providing a Fringe Benefit to an employee, then yes you are correct, as per this page, employers can also generally claim GST credits for items provided as Fringe Benefits, subject to eligibility. They will be reported at G11 as "purchases paid for by an employee that you have reimbursed"

However, if the fringe benefit that is provided is private health insurance, there is no GST credit claimable, as private health insurance is GST free.

Hope this helps,

Rachael B.

[#5]

Ah, of course! Health insurance was a terrible example for my question. That makes perfect sense now, though. Thanks for your help!

Jon