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The ATO guidance for employers COVID-19 vaccination incentives

The ATO has provided guidance for employers on the tax and super obligations where employees are given COVID-19 vaccination incentives and rewards. Key points for employers to consider:


๐Ÿ”ธ If you give your employees incentives or rewards for getting their COVID-19 vaccination, you need to consider any tax and super obligations. These tax and super obligations also apply to incentives or rewards offered for a COVID-19 booster dose.


๐Ÿ”ธ The tax and super consequences differ depending on whether you give your employees a cash payment, paid leave, transport to and from the vaccination, or other non-cash benefits.


๐Ÿ”ธ The tax consequences are different depending on whether the incentive or reward is available exclusively to employees, or more generally to clients or the public.


The ATO guidance also sets out 3 scenarios and the relevant tax treatment:*


๐Ÿ”ธ Example 1 - employer gives employee goods A shoe store gives each employee who receives both of their COVID-19 vaccinations shoes of their choice up to the value of $300. Dominic, an employee, receives both of his vaccinations and receives two pairs of shoes with a total retail value of $300. The shoes are in-house property benefits and the store does not give their employees any other in-house benefits during the FBT year. The employer is within the $1,000 aggregate threshold for in-house benefits provided to Dominic and the other requirements relating to the concession are met. The taxable value of the fringe benefit is reduced to nil and the store has no FBT obligation in respect of those benefits.


๐Ÿ”ธ Example 2 - employee receives cash payment Miranda's employer is offering all of its employees a $200 payment for getting both of their COVID-19 vaccinations. Miranda receives an extra $200 in her fortnightly pay and her employer reports this as salary and wages on her income statement at the end of the income year. The amount is also included in Miranda's ordinary time earnings for super guarantee purposes.


๐Ÿ”ธ Example 3 - free goods available to public


Food Co offers customers who have received both of their COVID-19 vaccinations a free meal. This offer is available to the general public, including Food Co's employees.


No FBT arises if free meals are provided to Food Co employees under this promotion because they are not provided in respect of their employment with Food Co, as the promotion is available to all vaccinated customers.


View guidance:

https://www.ato.gov.au/law/view/view.htm?docid=%22AFS%2FVACC_INC-COVID-19%2F00001%22


Information current as at 9 Dec 2021 *If you are unsure of the tax implications of your vaccine incentives, seek advice specific to your circumstances.

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