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Salary sacrifice of a portable electronic device

Who is eligible?

Continuing and fixed term contract staff members appointed under a University of South Australia industrial instrument are eligible to salary sacrifice. Casual staff members are ineligible to salary sacrifice a portable electronic device; please refer to the Salary Sacrifice Guidelines & Conditions for further information.

What are the costs?

A $5 administration fee applies per claim.

What conditions apply?

Under section 58X of the Fringe Benefits Tax Act (FBTAA) certain portable electronic devices may be exempt from FBT and able to be salary sacrificed provided:

The item is ‘Primarily for use in the staff member's employment'
The ATO describes an item primarily for use in the staff member's employment when purchased principally to enable the staff member to do their job.

The University has the discretion to decline any request where it is determined that the purchase is not used primarily for business use.

The staff member has not already received an item that is 'Substantially Identical'
Only one item of a kind with substantially identical functions can be claimed in a FBT year unless it is a replacement item. The FBT year runs from 1st April to 31st March. The ATO describes that items will have 'substantially identical functions' where the functions of two items are the same in most respects.

Declaration for a portable electronic device
The staff member will need to provide information in relation to their role and intended use of the portable electronic device that is substantiated by completing and signing the declaration on page two of the salary sacrifice form HRIS045.

The declaration is a document with legal effect, and will need to be provided to the Australian Taxation Office in the event of an audit. If either the Australian Taxation Office or Auditor General contests the validity of the staff member’s claim in the future, any additional Income and/or Fringe Benefit Tax, or penalties, interest or additional charges that may be applied, are the responsibility of the staff member.

What can I salary sacrifice?

A portable electronic device includes a laptop, tablet, calculator, personal digital assistant, portable printer and portable global positioning system (GPS) navigation receiver. The device needs to be easily portable and designed for use away from an office environment, small and light, can operate without an external power supply and is designed as a complete unit.

Tablets

Items allowable (acquired as initial purchase) are the tablet and operating system depending on work-related requirements.

Items not allowable are external modem/back up devices, non-business related software, external mouse/keyboard/speakers, carry bag, finance/insurance/credit charges, additional warranty and ongoing network charges.

Laptops

Items allowable (acquired as part of initial purchase) are inbuilt modem/network cards, DVD drive, memory upgrade, operating system or an inbuilt graphics card.

Items not allowable are external modem/back up devices, non-business related software, external mouse/keyboard/speakers, carry bag, finance/insurance/credit charges, additional warranty and ongoing network charges.

If the laptop is to be used on the University network please refer to following guidelines prior to purchasing: http://www.unisa.edu.au/ists/Staff/Purchasing/Hardware/default.asp

What about laptops used for 'self education'?

A laptop purchased for the dual purpose of employment and self-education satisfies the rules for FBT exemption. However, a laptop purchased solely for the purpose of self-education or professional development may not be FBT exempt.

You should seek clarification on your specific circumstances prior to purchasing the laptop. Forward details of the course you are undertaking, how it relates to your current employment and a copy of the approved study release form HR-8.1 to the Consultant: Salary Sacrifice. Individual claims will be reviewed by the University Tax Accountant on a case by case basis.

Portable electronic devices purchased overseas

Devices purchased overseas will need to be declared to customs on arrival in Australia and the necessary paperwork obtained stating the value in Australian dollars. Any excise tax or GST due on the item must be paid. The customs documentation will serve as the fully paid tax invoice and can be attached to the HRIS045 form

Note: The declaration on page 2 of the HRIS045 must be submitted on each occasion that a salary sacrifice claim is made for a portable electronic device.

How does it work?

1. The staff member purchases/pays for the item.
2. The GST is refunded to the staff member in full.
3. The cost of the item is deducted from pre-tax earnings reducing the taxation liability over the minimum number of pays.

Example

A staff member with an annual salary of $77,424 seeks to salary sacrifice a laptop costing $1,870 ($1,700 + $170 GST).

Salary Component	Before Packaging Per Annum$	After Packaging Per Annum$
Gross Salary	$77,424	$77,424
Less pre-tax laptop computer		$1,700*
Less pre-tax UniSA administration fee		$      5
Taxable Gross Salary	$77,424	$75,719
Less Taxation	$18,206	$17,632
Plus reimbursement of laptop computer		$1,870
Paid by UniSA	$59,218	$59,957
Less post-tax laptop computer	$1870	$1,870
Net Take-home salary	$57,348	$58,087
Total saving made by salary sacrificing laptop		$739

Note:     * Cost less the GST is salary sacrificed.
           

What do I do next?

1. Read the Salary Sacrifice Guidelines & Conditions
2. Attach the original tax invoice and proof of payment to the HRIS045 - Salary Sacrifice Form and complete the declaration on page 2.
3. Forward form, original tax invoice and proof of payment to the Consultant: Salary Sacrifice,
   Human Resources Unit, Third Floor, 101 Currie Street, GPO Box 2471, Adelaide 5001

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