Does the “half price laptop” still exist?
In mid-May last year we saw the rules affecting the salary sacrificing of laptops, PDA’s and other FBT exempt items change – but the benefits of salary sacrificing for employees are still available and it doesn’t necessarily mean extra work for HR or Payroll managers.
Under the new rules, the FBT exemption will be limited to one item a year for each type of eligible work-related items. These items, including laptops, will have to be used ‘primarily’ for work. What does ‘primary work use’ mean? ‘Primary’ does not mean the ‘amount of time’ you spend on the laptop but relates to the intention of the purchase, for example is it for ‘a work related purpose?” Does the employee ever check work emails at home? This is a work related purpose.
For HR and Payroll managers, it means you should ensure a thorough audit trail, the work test for laptops is similar to the one that applies to mobile phones. Most employers ask staff to sign a declaration at the time of purchase, stating that the item is used primarily for work.
Checklist for Employers and Payroll Managers:
- Be aware of the new rules. Familiarise yourself with the options available for Salary Sacrifice – Check out the Australian Tax Office web site http://www.ato.gov.au
- Ensure that employees know what they can salary sacrifice and what they can’t – this depends on the type of company you are and what you want to offer. The most popular option is the laptop.
- Have an audit trail / check list in place – this needs to be maintained by the payroll department and include all the relevant documentation. For laptop purchases this should include the following:
- Employee declaration
- Tax invoice / receipt of the purchase from the supplier as evidence of laptop purchase.
- Ideally be aware of the source of the product and purchase – ensure reliable suppliers.
If you need a laptop for work (or to do work tasks on the laptop), then salary sacrifice is still available to you and still means you are getting a better deal.
A great add-in at low cost to an employee benefits program
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