TaxRambling.com

An expense fringe benefit arises when an expense is reimbursed, irrespective of when the employee incurred the expense that is reimbursed. So if you forgot to salary package an expense that it would have been beneficial to salary package then just get it reimbursed today and the benefit arises.

First a silly example… For ten years you purchase the Australian Financial Review online for $770 each year ($70 GST). Why not reduce your salary by $7,000 ($700×10 year), get the $7,700 reimbursed and have the employer recover the $70 of GST for each year ($700). You just have to track down the tax invoices and you will get $700 for it…

And now the real example… A taxpayer was asked to relocate to another city for work. They sold their house in the previous location and bought a new house in the new location. The real estate agent charged $9,000 and the stamp duty was $35,000. And it all happened a couple of year ago. This year the employee salary packages $44,000 and get these costs (exempt from FBT under section 58C of the FBTAA86) reimbursed. If you are on the highest marginal rate that is a tax saving of over $21,000. Nice!