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New fringe benefits tax exemption for redundant employees

The government will introduce an exemption from the 47% fringe benefits tax (FBT) for employer-provided retraining and reskilling benefits provided to currently, or soon to be, redundant employees where the benefits may not be related to their current employment.

The government will introduce an exemption from the 47% fringe benefits tax (FBT) for employer-provided retraining and reskilling benefits provided to currently, or soon to be, redundant employees where the benefits may not be related to their current employment. This measure applies from announcement.

Currently, employers must pay FBT if training for currently, or soon to be, redundant employees doesn’t have sufficient connection to their current job.

This measure will:

  • Offer an FBT exemption for a broader range of retraining and reskilling benefits.
  • Incentivise employers to retain redundant employees and train them for their next career.

This measure will not:

  • Apply to retraining acquired by way of a salary packaging arrangement,
  • Be available for Commonwealth supported places at universities (these already receive a benefit), or 
  • Extend to repayments towards Commonwealth student loans.

Deductions for education and training expenses

The government will also consult on allowing an individual to deduct education and training expenses they incur themselves where the expense is not related to their current employment.

Individuals can currently deduct education or training expenses they incur which are sufficiently related to their current employment.