Employers who provide training or education to employees who are redundant, or soon to be made redundant, may be exempt from fringe benefit tax (FBT).
Retraining and reskilling benefits are exempt from FBT where the:
- employer provides a benefit in respect of training or education to a redundant, or soon to be redundant, employee
- employer has complied with all obligations under the Fair Work Act 2009 that relate to the employee’s redundancy, and
- education or training that is provided is
- not related to the employee’s current job role, and
- for the primary purpose of helping that employee gain new employment.
The exemption includes employees being redeployed within your business or seeking employment elsewhere.
The exemption covers the provision of education or training (such as reimbursing or paying the course fees or giving training) and also benefits associated with the education or training (such as related course materials, textbooks, travel, and accommodation).
There are no limits on the number of training or education courses an employee may undertake, or on the cost of the education or training.
When an employee is ‘redundant’
For the purpose of this exemption, an employee is considered ‘redundant when:
- their employer no longer requires or reasonably expects to require their job because of changes in the operational requirements of the employer’s business or undertaking. The employee’s job will not be performed by anyone else in the business
- they are no longer required in one part of your business but can be redeployed to another part of your (or your associate’s) business.
Employees are considered ‘soon to be made redundant when:
- you reasonably expect the employee to be made redundant, but you have not yet acted upon this.
This information was sourced from www.ato.gov.au – for more information or to clarify if this affects your business’s fringe benefits tax speak with your STS Accountant today.