Mobile Phones
Description
An employee may salary package the cost of a mobile phone provided it is primarily used for the employee’s employment at the University.
What is allowable?
Whilst the FBT Act has no definition of "primarily" for salary sacrificing purposes the ATO considers it to be taken as greater than 50%, which the employee must be able to substantiate.
The cost of calls and rental is not included. Only the cost of the handset is permitted as a salary sacrifice item.
Taxation issues / status
GST will apply on the purchase price.
Fringe Benefits tax does not apply
Substantiation Documentation
An employee must submit the original receipt and tax invoice for reimbursement of the expense. The purchase must be in the name of the employee and specify the purchase item is a mobile phone hand set.
The employee must declare the usage is primarily for business use.
Form of Payment
The employee purchases the phone.
The financial benefit to the employee is a reduction in their fortnightly PAYG tax.
The employee will receive the tax benefit over a 12 month period (26 pays). This will commence on the next available pay period following receipt of the form.
The process is:
- The GST amount paid will be reimbursed in the first pay period.
- The package benefit (reduced tax) will be paid over 12 months (26 pays).
Package Cost
The cost of the phone plus a one off administrative fee of $10 to to cover the additional work required in the administration. The administration fee will be treated as salary sacrifice expense and deducted from the employee's pre tax pay in the first pay period.
How to Apply
Employees must complete the Salary Packaging (Mobile Phone) form HR 32C and attach the reimbursement claim form with the original receipt. These should be sent to "Salary Packaging Co-ordinator", Human Resources, 3 rd floor Raymond Priestly Building (ext 47795)
HR will process the forms, email confirmation of the processing and provide dates of when the reimbursement will take place.