Non-cash fringe benefits provided by employers are subject to FBT, however, if the benefit contributes to the health and safety of the employee, this may exempt it from FBT.
The benefit needs to qualify the following requirements:
- Must be related to the employees health or safety
- Must be aimed at managing risks to health and safety in the workplace as provided under the Health and Safety at Work Act 2015 (HSWA)
- If it was provided on the employer’s premises, it would be excluded under section CX 23.
A benefit that addresses a specific harm or hazard to the health and safety of an employee would meet this criteria. This is because every employer has an obligation under the HSWA to minimise, and where possible, eliminate, risks to employees.
The healthy and safety exemption for benefits is based on the employer’s subjective assessment of potential or actual risks in the workplace. An example of a specific health and safety benefit could be physio appointments that target pain in the area likely to occur due to the employees roles and obligations in the workplace.
Employers should consult a tax professional if there is confusion regarding section CX 24 of the ITA which will exclude benefits from the exemption if benefits are used or consumed on employer premises.