The recent John Holland v ATO case surrounding the deductibility to Fly-In-Fly-Out costs has put the whole FIFO sector back in the headlines. With the ruling overturned, it’s highlighted how companies can benefit when applying the Fringe Benefit Tax (FBT) rules properly and in a compliant way.
While this decision, and subsequent successful High Court appeal, does not affect the majority of FIFO arrangements, this case has highlighted a number of rules that need to be adhered to when providing these benefits to your employees.
The place of work must be designated as Remote as per s140. Interestingly, this was a major argument in the ATO’s case against John Holland, that Geraldton WA is an Eligible Urban Area and as such is Non-Remote
The employee’s work roster must be variable or rotating. Not simply fly-in Monday and fly-out on Friday.
A full list of remote and non-remote towns appears on the ATO website.
Do you know that your employees can salary package FIFO costs?