Understanding the new: We explore Australia’s FBT tax exemption law

The federal government has removed the hefty 47% Fringe Benefits Tax (FBT) from employer retraining and reskilling initiatives for employees whose roles have recently been made redundant. Effective from 2nd October 2020. 

Previously, the FBT made it difficult for most employers to provide transitioning employees with any type of upskilling or training courses as a part of their career transition support programs due to the negative tax implications. 

However, COVID-19 and ANZ Bank have led the charge to remove the crippling tax, so employers can better support their people with the resources necessary to meet the demands of the future. 

The future of work lies in upskilling. Global studies and reports have indicated that in order to meet the demands of the future, employees and employers will need to invest in learning and development to meet short and long-term skills gaps. 

With the FBT out of the picture, ​employers will be enabled to provide more holistic, well-rounded support for transitioning employees to be better prepared for their next career opportunity, or to change roles internally. 

How does the FBT exemption apply?

According to the Australian Tax Office, retraining and reskilling benefits are exempt from FBT where the:

  • employer provides a benefit in respect of training or education to a redundant, or soon to be redundant, employee
  • employer has complied with all obligations under the Fair Work Act 2009 that relate to the employee’s redundancy, and
  • education or training that’s provided is:
    • for the primary purpose of helping that employee gain new employment, and 
    • not related to the employee’s current role. 

The exemption includes employees being redeployed within your business or seeking employment elsewhere. There are no limits on the number of training or education courses an employee may undertake, or on the cost of the education or training.

How can employers make the most of this? 

Employers can now work towards providing better support for their transitioning employees by giving them access to retraining, upskilling and skill enhancement programs. Partnering with a company that provides these services (and more) to your employees is the best and easiest way to provide a valuable and positive career transition experience.

After all, your transitioning staff will be the face of your employer brand during what is commonly a negative experience. So, making sure they are well supported during their transition period will help enhance your employer brand and employee sentiment. 

Partnering with a company that provides these services (and more) to your employees is the best and easiest way to provide a valuable and positive career experience. 

Improve career transition with Career Money Life

Career Money Life is an innovative career transition and career development company that has the widest range of upskilling and retraining options for employees. 

We offer multiple online, face-to-face and virtual suppliers across Australia and New Zealand, ensuring that your employees will be spoilt for choice. ith access to training courses for the “Top 15 Emerging Skills Of The Future”, your employees will have access to a range of vetted, high quality training providers that can help them develop the skills they need to thrive in the future of work. 

We take care of the people you let go. Partnering with Career Money Life means you can rest assured that you are providing the right services, by not only giving them access to curated support and tools but by empowering them with complete choice of services, including upskilling and retraining at the click of a button.  

Get in touch if you’re thinking about providing quality retraining and upskilling options for your employees with a different, more human approach.

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