FBT and Expense Payments (Australia) Procedures

Parent Policy

Fringe Benefits Tax (Australia) Policy

An expense payment fringe benefit may arise in either of two ways:

• where the employer reimburses an employee for expenses they incur, or
• where the employer pay's a third party in satisfaction of expenses incurred by an employee.

In either case the expenses may be business expenses or private expenses, or a combination of the two.

Definition of terms

FBT: Fringe Benefits Tax
ATO: Australian Taxation Office
Taxable value: Value of the fringe benefit before it is grossed up
Primarily (employer owned mobile phone use): is defined as at least 50% business use

Expense Payments Fringe Benefits

• Where the University reimburses an employee for expenses, in order to reduce the taxable value of the expense an Expense Payment Declaration or Recurring Fringe Benefit Declaration must be obtained from the employee substantiating the business nature of the employee's expenditure.

Responsibility

Employee being reimbursed and Departmental Finance Officer

• Where a department chooses to allow an employee to submit a Recurring Fringe Benefit Declaration it will be the responsibility of that department to maintain a "system" which can provide the declarations if requested and ensure that a new declaration is obtained after five years.

Responsibility

Departmental Finance Officer

• The Expense Payment Declaration must be attached to all claims for reimbursement or filed in the Department with the Corporate Mastercard expense paperwork.

Responsibility

Departmental Finance Officer

• Staff members claiming a high business percentage usage should be prepared to substantiate their declaration with at least 4 weeks of diary entries recording all usage.

Responsibility

Employee being reimbursed

• All expense payments must be either reimbursed or paid via the Corporate Mastercard. Monash must not be directly invoiced for these expenses.

Responsibility

Employee being reimbursed

• A mobile phone or a car phone owned by the employer and primarily for use in the employee's employment is an exempt benefit.

Responsibility

Employee being reimbursed and Departmental Finance Officer

Content Enquiries: Finance Policy