Changes to Government cap on Fringe benefit exemption for year 2016-17
The Federal Government has imposed a tight cap on fringe benefit tax exemptions for public and not-for-profit hospital staff, fuelling concerns many institutions will struggle to attract and retain doctors, nurses and other highly qualified health workers, undermining their ability to provide vital care.
Confirming fears public hospitals would be caught up in attempts by the Commonwealth to boost its revenue, the Government has announced plans to introduce a cap on FBT exemptions for meals and entertainment for hospital employees.
Under current arrangements, hospital staff, including doctors and nurses, are eligible for FBT exemptions worth up to $17,000 a year, while the FBT exemption for meals and entertainment is uncapped.
But the Government has flagged a crackdown on the perk, announcing the introduction of “a single grossed‑up cap of $5,000 for salary sacrificed meal entertainment and entertainment facility leasing expenses”.
The change is due to come into effect from 1 April next year, and the Government said it would “improve the integrity of the tax system by introducing a limit on the use of these benefits”.
This new fringe benefit cap will have bad implication on doctors and nurses working in private and public hospitals. The impact would be $12,000/ will be add back to your salary and end up paying an average yearly $5000 more on your tax. For your tax planning and advise please contact: Mas Tax Accountant, Lal Paulose on 04 32 397 250 or email : lal@mastax.com.au
