Are you up to speed on the implications of Rapid Antigen Tests in the workplace?
Organisations providing Rapid Antigen Tests (RATs) to employees for self-administration, or those reimbursing the costs of these tests bought by employees are contributing to a Covid safe workplace, however they could also simultaneously and unintentionally be triggering a Fringe Benefit Tax (FBT) event.
While it is probably easily understood that providing RATs to employees for use outside of the workplace for personal reasons is likely to attract an FBT, there are some instances when they are deemed exempt.
According to the ATO, tests are exempt from FBT as ‘work-related medical screening’ when both of the following conditions apply:
- The test is administered by a legally qualified medical practitioner or nurse, and
- Testing is made available to all employees
So, as long as the tests are offered to all employees it won’t trigger an FBT event; regardless of whether or not employees choose to take a test.
Since many RATs are self-administered tests and not point-of-care (not administered by a medical practitioner or nurse), they are likely to attract an FBT unless another exemption can be applied – the Minor Benefits Exemption and the Otherwise Deductible Rule.
Minor Benefit Exemption
For this exemption to apply, tests must be provided on an infrequent basis and the cumulative value of the tests per employee over FBT year (eg. 1st April – 31st March) must be less than $300.
Otherwise Deductible Rule
For this rule to apply the supply of tests would need to be a mandated requirement of the relevant jurisdiction.
If your business is currently providing RATs on a regular basis to key employees as a way to ensure your day-to-day operations continue, particularly in the absence of mandatory testing, you should prepare for an FBT consequence in the approaching FBT year.
Please note that the subject of FBT consequences and deductibility is likely to be a fluid issue and the rules adjusted according to evolving circumstances.
On a better, more concrete note, tax deductions can be made by employers who supply RATs to employees – it is considered an employment related expense intended to provide a safe working environment.
To Supply or Not Supply?
As a business, you should carefully consider your decision to supply rapid antigen tests to employees since in doing so you can expect an FBT in the upcoming FBT year.
Beyond Advisors offers professional advice for businesses of all shapes and sizes. For any help or assistance on the FBT implications of supplying RATs to employees and any relevant exemptions you can get in touch with our helpful team today.