With parts of Australia regularly experiencing flooding, bush fires and other severe weather events, tax is probably the last thing on everyone’s minds when lending a hand to the affected workers. However, did you know that if you run a business, there may be certain benefits you can provide to your employees by way of emergency assistance that are exempt from fringe benefits taxes?
Usually, providing your employees or their associates with benefits, such as accommodation or transport, are considered to be fringe benefits. However, in the situation of an emergency such as natural disasters, providing immediate relief for victims (or potential victims) that you employ may allow you to be exempt from the fringe benefit tax.
The assistance you provide to employees can be exempt from fringe benefits tax when it fits the below criteria:
- when it is considered first aid or other emergency health care
- when it is considered emergency meals, food supplies, clothing, accommodation, transport or household goods
- when it is considered as temporary repairs to an emergency
Emergencies don’t just include natural disasters of course. Exemptions may also apply where your employee has been affected by an accident, a serious illness, armed conflicts, civil disturbances or any similar event.
There are specific requirements however when providing health care to your employees. The exemption only applies to health care provided for the below:
- by an employee of yours (or of a related company)
- on your premises (or those of a related company)
- at or near an employee’s work site.
For example, the fringe benefits tax exemption would not apply if you pay for an accident victim’s medical or hospital bills, but would apply to emergency treatments by a company doctor at the accident site.
Certain long-term benefits – such as providing a new house or car to replace one destroyed as a result of an emergency are not exempt from the fringe benefit tax.