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Salary Sacrifice Laptop

Discussion in 'Accounting, Tax & Legal' started by Meggsy, 3rd Mar, 2008.

  1. Meggsy

    Meggsy Well-Known Member

    15th Feb, 2007
    Brisbane, QLD
    I can't seem to find out exactly how to do this. I've talked my parents into salary sacrificing a laptop but I want to make sure my understanding is correct:

    Employee purchases Laptop
    Employee gives tax invoice to employer
    Employer claims GST on laptop
    Employee gets reduced salary for x weeks (until inc GST amount is sacrificed from salary)

    My questions:
    My parents have their own company, does this mean that x can be any number of weeks?
    Does there need to be an official written agreement?
    When putting this into quickbooks, I'm guessing it would just be a employer-paid benefit and ensure that it is not taxable?
    If the laptop is for me, and not work related for them, does that have implications?

    Anything else I should be aware of?


    From FBT Act...

    58X(1) [Exempt benefits]

    Any of the following benefits provided by an employer to an employee of the employer in respect of the employee's employment is an exempt benefit:

    (a) an expense payment benefit where the recipients expenditure is in respect of an eligible work related item;

    (b) a property benefit where the recipients property is an eligible work related item;

    (c) a residual benefit where the recipients benefit consists of the making available of an eligible work related item.

    58X(2) [Eligible work related items]

    Subject to subsections (3) and (4), each of the following is an eligible work related item:

    (a) a mobile phone or a car phone;

    (h) a notebook computer, a laptop computer or a similar portable computer;


    58X(3) [Mobile phones or car phones]

    A mobile phone or a car phone is only an eligible work related item if the phone is primarily for use in the employee's employment.

    58X(4) [Notebook computers or laptop computers]

    A notebook computer, a laptop computer or a similar portable computer is not an eligible work related item if, earlier in the FBT year, an expense payment benefit or a property benefit of the employee has arisen in relation to another notebook computer, laptop computer or similar portable computer.


    Since it explicitly states that phones are only work related if they are mainly used for employment, but it doesn't say that for laptops, does that mean a laptop is just deemed work related even if the employee gives it to their child?
    Last edited by a moderator: 3rd Mar, 2008
  2. Billv

    Billv Getting there

    15th Jul, 2007
    Sydney, NSW
    Your company accountant will know what is best in your parents situation.

    Our company will pay for the purchase but would want to deduct the money in the same financial year.
    We are reaching the end of the financial year.
    So If I bought a laptop today for $2K I will only have 4 months to deduct $500 per month.

    I would have to fill out a form.
    I believe I can still buy it now but can claim it in the next financial year (which will be a full year)that way the purchase won't have much impact on my sallary.

    That's all I know, I hope it helps.

  3. TryHard

    TryHard Well-Known Member

    17th Aug, 2005
  4. Rob G.

    Rob G. Well-Known Member

    6th Jun, 2007
    Melbourne, VIC
    This is only my thoughts, they will need checking ...

    If you are employed by your own company, then there need not be a salary sacrifice as such - up to you !!

    Each employee can be remunerated using one laptop per FBT year (April-March) with the FBT exemption.

    Company can purchase it, or reimburse the employee (employee must provide receipt - check this !!).

    Company claims the expense in full as an employee expense - not depreciation as the company is not the holder of the asset.

    Company does not need to report or pay FBT as exempt under s.58X FBTAA86.

    Since the benefit is not income of the employee, the company does not need to withold tax.

    The SGC definition of salary has been widened, but I don't think it includes non-reportable nor exempt benefits (check this !!).

    Check it out on the ATO website, advice for small business.