Tax Savings Strategy 196 | FBT Exempt Work Related Items

Providing the following work related items to employees is tax deductible and FBT exempt:

• Portable electronic devices such as mobile phones, laptops, tablets, portable printers and GPS navigation receivers.
• Computer software.
• Protective clothing
• Briefcases.
• Tools of trade.

Even when employees salary sacrifice the cost of the items with their employees they still benefit from saving the GST and having an upfront tax saving (instead of purchasing the item and depreciating it over several years in their tax return). The FBT exemption is limited to items primarily for use in the employee’s employment and one item per FBT year for items that have a substantially identical function, unless the item is a replacement item. An exception to this rule allows small businesses to provide employees with more than one work related portable electronic device in an FBT year – even if the devices have substantially identical functions.