Ending FIFO work arrangements – end of tax concessions?

Ending FIFO work arrangements – end of tax concessions?

Daniel Hodgson and Hayley Lock discuss the long term viability of tax concessions for fly-in-fly-out (FIFO) workforces.

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Pressure continues to build on the long term viability of fly-in-fly-out (FIFO) workforces as the Strong and Sustainable Resource Communities Bill 2016 progresses its way through Queensland State Parliament.

If enacted, and there remains some way to go, the Bill will ban large QLD resource projects from using a 100 percent FIFO workforce where the project is within 100km of a regional centre, requiring companies that have traditionally relied on FIFO workers to create a workforce that it is hoped will support the long-term sustainability of the local community.

It is well known that significant fringe benefits tax (FBT) concessions apply to benefits provided to employees working under FIFO arrangements, that can help reduce the cost of employment.

However, all is not lost where companies are considering ways to incentivise their employee workforce to relocate to, and live in, remote locations, as a different suite of FBT concessions and exemptions can apply to such arrangements.

For example, the cost of relocating the employee, their family and possessions to the new work location is generally exempt from FBT.

In certain situations, the incidental costs of selling an employee’s home in their previous place of residence, and buying a property in their new work location, can be paid FBT free – and this extends to stamp duty on acquisition!

A significant number of FBT concessions and exemptions also apply to various housing and utility benefits provided to employees that reside in remote locations, and concessions can even apply to travel costs for certain personal leave arrangements of such employees.

Where provided correctly, such benefits can generally be provided to employees under salary sacrifice arrangements, enabling employers to maximise employees’ net remuneration and support the industry’s ongoing focus on managing remuneration costs.

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