Normally employers have to pay a worker super. However, this becomes confusing with the different visas that employees might be on. Some rules are listed below.
Paying super to temporary residents Temporary residents working in Australia are eligible for super guarantee. When temporary residents leave Australia, they can claim the super paid as a departing Australia superannuation payment (DASP). This is provided that they meet the requirements where you must:
Be 18 years old or over (if you are under 18 you must meet the above conditions and work over 30 hours per week to be entitled to SG) and,
Paid $450 or more before tax in a month.
Employees working overseas An employee sent to work overseas must be paid superannuation by their employer. The other country may require the employer or employee to pay super there as well if Australia does not have a bilateral agreement with that country. To gain exemption from the super payment in the other country, the employer needs to show the authorities in the other country a certificate of coverage gained from the ATO.
Employees not eligible for super
Non-resident employees, you pay for work they do outside Australia
Some foreign executives who hold certain visas for entry permits
Employees temporarily working in Australia who are covered by a bilateral super agreement. You must keep a copy of the employee’s certificate of coverage to verify this arrangement.
For businesses in Australia, providing fringe benefits to employees can be a valuable way to attract and retain talent, as well as incentivise performance.
However, employers need to understand their obligations regarding Fringe Benefits Tax (FBT). The Australian Taxation Office (ATO) administers FBT, a tax on certain non-cash benefits provided to employees in connection with their employment.
Let’s explore the types of fringe benefits subject to FBT to help businesses navigate this complex area of taxation.
Car Fringe Benefits
One common type of fringe benefit is the provision of a car for the private use of employees. This includes company cars, cars leased by the employer, or even reimbursing employees for the costs of using their own cars for work-related travel.
Housing Fringe Benefits
Employers may provide housing or accommodation to employees as part of their employment package. This can include providing rent-free or discounted accommodation, paying for utilities or maintenance, or providing housing allowances.
Expense Payment Fringe Benefits
Expense payment fringe benefits arise when an employer reimburses or pays for expenses incurred by an employee, such as entertainment expenses, travel expenses, or professional association fees.
Loan Fringe Benefits
If an employer provides loans to employees at low or no interest rates, the difference between the interest rate charged and the official rate set by the ATO may be considered a fringe benefit and subject to FBT.
Property Fringe Benefits
Providing employees with property, such as goods or assets, can also result in fringe benefits. This can include items such as computers, phones, or other equipment provided for personal use.
Living Away From Home Allowance (LAFHA)
When employers provide allowances to employees who need to live away from their usual residence for work purposes, such as for temporary work assignments or relocations, these allowances may be subject to FBT.
Entertainment Fringe Benefits
Entertainment fringe benefits arise when employers provide entertainment or recreation to employees or their associates. This can include meals, tickets to events, holidays, or other leisure activities.
Residual Fringe Benefits
Residual fringe benefits encompass any employee benefits that do not fall into one of the categories outlined above. This can include many miscellaneous benefits, such as gym memberships, childcare assistance, or gift vouchers.
Compliance With FBT Obligations
Employers must understand their FBT obligations and ensure compliance with relevant legislation and regulations. This includes accurately identifying and valuing fringe benefits, keeping detailed records, lodging FBT returns on time, and paying any FBT liability by the due date.
Fringe Benefits Tax (FBT) is an essential consideration for businesses that provide non-cash benefits to employees.
By understanding the types of fringe benefits subject to FBT, employers can ensure compliance with tax obligations and avoid potential penalties or liabilities.
Seeking professional advice from tax experts or consultants can also help businesses navigate the complexities of FBT and develop strategies to minimise tax exposure while maximising the value of employee benefits. Why not start a conversation with one of our trusted tax advisers today?