Under the current rules, a fringe benefit arises when an employer contributes to an employee’s superannuation scheme. Unless the contribution qualifies as an ‘employers superannuation cash contribution’, it is taxed under the FBT rules. In the case where an employer contributes to a sickness, accident or death benefit of an employee, a FBT also arises.

The FBT treatment of these contributions creates compliance costs in the filing of FBT returns specifically for cross-border employees and their employers.

Proposed Amendments

The amendments seek to ensure that employer contributions to foreign superannuation schemes along with contributions to a sickness, accident or death benefit of an employee will be subject to PAYE rather than FBT. This will reduce unnecessary compliance costs and simplify the treatment of such contributions.

Effective Date

The proposed amendments will take effect on 1 April 2024.

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