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Salary sacrificing

While many employees can sacrifice salary in exchange for most work-related purchases, it is essential that employers are aware of FBT when working out the expense that will replace the income in a salary sacrifice arrangement. Employees should also be wary that if their employer has to pay FBT, that cost will most likely be passed on to them under a salary sacrifice arrangement.

If an employee needs to purchase equipment for their work, they can work out a salary sacrifice with their boss to buy the equipment and reduce their personal tax bill if:

There are particular types of benefits an employer can provide to their employee that may trigger an FBT liability if provided under a salary sacrifice arrangement. These include cars, property and expense payments.

However, there are certain fringe benefits that are specifically exempt from FBT under the law. These work-related FBT exemptions can be beneficial to employees under a salary sacrifice arrangement. To be exempt, a purchased item must be:

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