Business Travel And ‘Otherwise Deductible Rule’

When an employer provides accommodation to an employee while they are away on business the benefit would be fully exempt from Fringe Benefits Tax (FBT) under the ‘Otherwise Deductable Rule’. Recently the ATO confirmed that when an employee’s spouse has accompanied an employee it is still exempt under the Otherwise Deductable Rule provided no extra cost has been charged for the spouse.

As an example, if the spouse pays his/her own airfare and stays in the hotel at the company’s expense with their spouse it is not considered private use of accommodation and therefore there is no FBT liability.