FBT Power Plays: The Boss-Level Guide to Salary Packaging

FBT exemptions salary packaging Australia

The last two articles were heavy going. We covered school fees that cost $37,000 to pay, phantom income pushing employees into HECS repayments, and golf days that quietly attract a 47% tax. Not exactly cheerful reading.

This one is different. FBT isn't only a compliance problem. Used properly, it's a planning tool. There are specific exemptions in the tax act that let you give staff laptops, electric vehicles, and meaningful gifts completely tax-free. And if you work in healthcare or the not-for-profit sector, the salary packaging rules are genuinely extraordinary.

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— Paula Livingston

Work-Related Electronics: The Section 58X Exemption

Section 58X of the tax act says if you give an employee a portable electronic device primarily for work, the FBT is zero. Full stop.

That covers laptops, tablets, iPads, mobile phones, GPS units, and electronic diaries.

The small business advantage: large corporations can only give one device per category per employee each year. If your business turns over less than $50 million, that restriction doesn't apply. You can give an employee a laptop, an iPad, and a phone in the same year and pay zero FBT on all of it, as long as they're used primarily for work.

Here's what the numbers look like on a $3,000 MacBook Pro:

• Via salary: to put $3,000 in the employee's hand after tax, you'd need to pay roughly $4,500 in gross salary

• Via company purchase: buy the device, claim the GST back, claim the tax deduction. Net cost to the business is around $1,900

• The result: the business spends $1,900 instead of $4,500, the employee gets the MacBook

If you're not doing this for your key staff, you're spending about $2,600 more than you need to, every time.

Electric Vehicles: The Best Tax Break Available Right Now

If your company provides an electric vehicle (EV) below the luxury car tax threshold (approximately $91,000), the FBT is completely exempt. Zero.

The exemption covers lease payments, registration, insurance, servicing, and the electricity to charge the car.

Here's how it works with salary packaging:

• The employee reduces their pre-tax salary by the monthly lease cost (for example, $1,500 per month for a Tesla Model Y)

• Because the cost comes out before tax, the reduction in take-home pay is only around $800 to $900 per month

• The employee drives a $65,000 car for roughly $200 a week

Worth noting: even though the employer pays zero FBT, the car's value (typically $15,000 to $20,000) still appears on the employee's income statement as a Reportable Fringe Benefit. If they have a HECS debt or are close to a Medicare Levy Surcharge threshold, that matters. Always model the full picture with Ben before packaging.

Gifts vs. Entertainment: The Hamper Wins Every Time

There are two categories of staff rewards and the tax treatment is completely different.

Entertainment covers movies, dinners, and experiences. Non-entertainment covers gift vouchers, hampers, wine, and flowers. If a non-entertainment gift is under $300 and given infrequently, it is both FBT-exempt and tax-deductible.

Type	Example	Under $300?	FBT-Exempt?	Tax Deductible?
Entertainment	Staff dinner	Yes	Yes	No
Non-entertainment	Gift hamper or voucher	Yes	Yes	Yes
Entertainment	Staff dinner over $300	No	No	Yes (with FBT)

The dinner is the tax loser. The hamper is the tax winner. If you want to reward staff efficiently, buy the hamper.

Salary Packaging Caps for Healthcare and NFP Workers

If you work in a public hospital, a registered charity, or a public benevolent institution, the salary packaging caps available to you are some of the most underused benefits in Australian employment.

Sector	Living Expenses Cap (tax-free)	Meal Entertainment Cap
Public Hospital	$9,010 per year	$2,650 per year
Charity or PBI	$15,900 per year	$2,650 per year

A charity worker can receive up to $15,900 of their salary, used for rent, mortgage, or everyday expenses, completely tax-free. On top of that, there's a $2,650 dining card for restaurants, paid with pre-tax dollars.

If you work in one of these sectors and haven't set up salary packaging, you're essentially giving money away. It takes about 15 minutes to arrange. Do it today.

Relocation Packages: A Smarter Way to Attract Talent

With skill shortages across Western Australia, competitive employers are looking beyond base salary. Relocation benefits are genuinely FBT-exempt, which makes them a powerful way to attract people from interstate.

If you hire someone who has to move their home to take the role, the following costs can be covered tax-free:

• Removalist costs for the employee's household

• Flights for the employee and their family

• Utility connection costs at the new property

• Temporary accommodation while they find a permanent place

A $10,000 relocation package delivers the full $10,000 in value to the employee. A $10,000 salary top-up gets taxed at their marginal rate, so they keep less. Same cost to you, much more valuable to them.

At Aevum Accounting, Ben De Rosa specialises in structuring salary packages, EV arrangements, and NFP packaging to make sure you're getting every dollar of benefit the tax system allows.

Click here to book a consultation with our team.

Disclaimer: The information and strategies shared in this article are for general informational purposes only and do not constitute specific tax or financial advice. Everyone's situation is unique, and tax laws are complex and constantly evolving. For personalised advice tailored to your specific individual or business needs, we always recommend consulting with a qualified professional at Aevum Accounting.