Salary Sacrifice

Q&A Tax

Question :

Today’s question is about salary sacrifice

If an employee wishes to salary sacrifice a laptop.

Is this an exempt for fringe benefit?

Is the employer able to claim the deduction?

 

Answer :

Normally, in a salary sacrifice arrangement for a laptop, the employee would be the owner of the laptop
and the arrangement will give rise to an expense payment fringe benefit. If that is the case, the
employer would be able to claim the salary sacrificed amount (because the provision of fringe benefit
relates to the business being carried on by the employer) but the employer cannot deduct the tax
depreciation of the laptop.

Please note that Section 40-45 ITAA 1997 normally denies an employee for claiming tax depreciation
deductions for portable electronic devices that is an expense payment fringe benefit but is exempt
under section 58X (eg, laptop computer used primarily in the employee’s employment). This is
regardless of whether the employee is the owner of the laptop.

If the benefit is not exempt under section 58X (eg, because it will not be used primarily in the
employee’s employment), the employee can only claim tax depreciation deductions in their individual
income tax return to the extent that the laptop computer is used for income-producing purposes.

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