Private ruling: Fringe benefits tax - Exempt residual benefit
Date of advice: 8 September 2025
Published: 10 November 2025
Ruling period: Fringe Benefits Tax (FBT) Year Ended 31 March 20XX | FBT Year Ended 31 March 20XX | FBT Year Ending 31 March 20XX | FBT Year Ending 31 March 20XX | FBT Year Ending 31 March 20XX
Date scheme commenced: 1 April 20XX

Ruling: Q1: Will the flights provided to the employees (Drivers) from the depot to the operating hubs be exempt residual benefits pursuant to subsection 47(7) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)? | A1: Yes


Relevant legislative provisions: Fringe Benefits Tax Assessment Act 1986 section 20 | Fringe Benefits Tax Assessment Act 1986 section 45 | Fringe Benefits Tax Assessment Act 1986, subsection 47(7) | Fringe Benefits Tax Assessment Act 1986, subsection 136(1) | Fringe Benefits Tax Assessment Act 1986, section 140

Reasons for decision: Summary: The provision of flights to the Drivers between a location to the operating hubs will constitute exempt residual benefits pursuant to subsection 47(7) of the FBTAA | Detailed Reasoning - Detailed reasoning: Section 47 of the FBTAA establishes exempt residual benefits. Subsection 47(7) of the states that a benefit is an exempt benefit: Where, during a period of employment with an employer: (a) an employee's usual place of employment is: (i) on an oil rig, or other installation, at sea; or (ii) at a location in a State or internal Territory but not in, or adjacent to, an eligible urban area; or (iii) at a remote location that is not a State or internal Territory; and (b) the employee is provided with residential accommodation, at or near that usual place of employment, by: (i) the employer; or (ii) an associate of the employer; or (iii) a person (in this subparagraph referred to as the ' arranger ') other than the employer or an associate of the employer under an arrangement between: (A) the employer or an associate of the employer; and (B) the arranger or another person; and (c) the employee, on a regular basis (i) works for a number of days and has a number of days off; and (ii) on completion of the working days, travels from that usual place of employment to his or her usual place of residence and, on completion of the days off, returns from his or her usual place of residence to that usual place of employment; and (d) the employee is provided with transport on a regular basis in connection with the travel referred to in subparagraph (c)(ii) and that transport is provided by: (i) the employer; or (ii) an associate of an employer; or (iii) a person (in this subparagraph referred to as the " arranger " ) other than the employer or an associate of the employer under an arrangement between: (A) the employer or an associate of the employer; and (B) the arranger or another person; and (e) it would be unreasonable to expect the employee to travel on a daily basis on work days between: (i) that usual place of employment; and (ii) the location of the employee's usual place of residence; and having regard to the location of those places; the residual benefit constituted by the provision of the transport referred to in paragraph (d) is an exempt benefit. The terms of this provision need to be considered in respect of the circumstances of the employer to determine whether the provision is satisfied so that the provision of the fly-in fly-out travel is exempt from fringe benefits tax is an exempt residual benefit. | Detailed Reasoning - Is the benefit a residual benefit?: As subsection 47(7) provides an exemption for residual benefits that consist of the provision of fly-in fly-out transport, it is necessary to consider whether the benefit is a residual benefit. Section 45 provides that a benefit will be a residual benefit if it is not a benefit by virtue of a provision of Subdivision A of Divisions 2 to 11 (inclusive) of Part III. The Drivers flights are arranged and paid for by the Employer and therefore the benefit provided is not an expense payment benefit under section 20 of the FBTAA, nor does the benefit fall within any other Division of 2 to 11. As the provision of flights to the drivers does not fall under any other Division of 2 to 11, the benefit provided will be a residual benefit under section 45 of the FBTAA. | Detailed Reasoning - Usual place of employment: Paragraph 47(7)(1)(a) requires there to be a usual place of employment. Subsection 136(1) defines employment: "in relation to a person, means the holding of any office or appointment, the performance of any functions or duties, the engaging in of any work, or the doing of any acts or things that results, will result or has resulted in the person being treated as an employee". That is, employment is defined by the performance, engaging or doing of the things that the person is employed to. It follows that an employee's usual place of employment is the place where those things are usually (i.e. habitually) performed. The usual place of employment for the Drivers is any of the operating hubs that they can be rostered to attend to perform the services as agreed under their employment contract. An employee may have more than one regular workplace. This position aligns with general industry practice as well as the ATO view in Taxation Ruling TR 2021, where it is stated at paragraph 27: "In some employment arrangements there may be more than one regular workplace established. This may be expressly provided for in the employment agreement or contract between the employer and employee, or it may arise as a matter of practice in the relationship between employer and employee. A second or subsequent place of work would become a regular place of work if it has become a normal or routine place where the employee works". The eligibility criteria in relation to subparagraph 47(7)(a)(ii) should be considered in its entirety such that the Drivers have a defined usual place of employment. Accordingly, as long as that usual place of employment is in a remote location in a State or internal territory, subparagraph 47(7)(a)(ii) will be satisfied. Relevantly, the Drivers may work at multiple sites, but they will always be remote sites, as established below. This would mean the key requirement is for the Drivers to be usually located at a remote location (not usually located in a specific or static remote location). | Detailed Reasoning - Remote location: The term 'remote area' is not defined in the FBTAA, instead, the FBTAA has a definition of 'eligible urban area' in section 140. A place is in a remote area if it is not in, or adjacent to, an eligible urban area. Subsection 140(1) of the FBTAA sets out what is an 'eligible urban area' and what is a location that is 'adjacent to an eligible area'. It states that: In this act: (a) a reference to an eligible urban area is a reference to: (i) an area that: (A) is situated in an area described in Schedule 2 to the Income Tax Assessment Act 1936; and (B) is an urban centre with a census population of not less than 28,000; and (ii) an area that: (A) is not situated in an area described in Schedule 2 to the Income Tax Assessment Act 1936 ; and (B) is an urban centre with a census population of not less than 14,000; and (b) a reference to a location that is adjacent to an eligible urban area is a reference to a location that, as at the date of commencement of this section: (i) was situated less than 40 kilometres, by the shortest practicable surface route, from the centre point of an eligible urban area with a census population of less than 130,000; or (ii) was situated less than 100 kilometres, by the shortest practicable surface route, from the centre point of an eligible urban area with a census population of not less than 130,000. Paragraph 140(1)(a) of the FBTAA provides that an 'eligible urban area' is a reference to an area that is an urban centre with a census population of not less than 14,000 (or 28,000 for an urban centre located in Zone A or B in Schedule 2 to the Income Tax Assessment Act 1936 (ITAA 1936) for income tax purposes). Paragraph 140(1)(b) defines a location that is 'adjacent to an eligible urban area' to include one that is: i. situated less than 40 kilometres from an urban centre with a census population of less than 130,000; or ii. situated less than 100 kilometres from an urban centre with a census population of 130,000 or more. Under this provision, an area will be treated as 'remote' where it is at least 40 kilometres from an eligible urban centre with a population of 14,000 or more (or 28,000 for an area located in either Zones A or B for income tax purposes) and at least 100 kilometres from an eligible urban centre with a population of 130,000 or more. The Drivers referred to in this ruling request are flying in and out of a location on a FIFO basis. From the depot they may either pick up a large haulage vehicle to be driven out to remote locations, or they may use a light vehicle for transport to their intended destination. The destination locations out of the depot are all more than 100kms away and not within 100 kms of any other non- remote area. Therefore, the Driver's usual place of employment is in a remote location and is not situated in or adjacent to an eligible urban area for the purposes of section 140 of the FBTAA. | Detailed Reasoning - Are the employees provided with accommodation at or near the worksite on working days by the employer, an associate of the employer or an arranger?: The Drivers are provided with accommodation as they travel around the different locations. Typically, this will be in motel style accommodation, camp style accommodation at sites or remote stations. Where no other accommodation available, Drivers sleep in their vehicles, which are specifically equipped for such situations. Do the employees, on a regular basis, work for a number of days followed by a number of days off, and travels to their usual place of residence on their days off? The Drivers work for a number of days on and have a number of days off. On completion of the work days, the employees travel from that usual place of employment to his or her usual place of residence. On completion of the days off, the employee returns from his or her usual place of residence to that usual place of employment. | Detailed Reasoning - Is the employee regularly provided with transport in connection with the travel between their usual place of residence and place of employment?: The Drivers are provided with transport as arranged and paid for by the Employer on a regular basis, being flights between their home location and the relevant operating hubs. In looking at whether the transport provided to an employee by the employer, being the flights between their home location and the operating hubs, is 'in connection' with the employee's travel between their usual place of residence and place of employment, reference can be made to Taxation Determination TD 2015/12 Fringe benefits tax: when are the duties of the employment of an employee of an employer who is a government body exclusively performed in, or in connection with, a public hospital or a hospital carried on by a society that is a rebatable employer?, which states in part: 53. In Collector of Customs v. Cliffs Robe River Iron Associates per Bowen CJ, Norling and Neaves JJ at paragraph 16: The meaning of the word 'connection' is both wide and imprecise. One of its common meanings is 'relation between things one of which is bound up with, or involved, in another.' The meaning of the phrase 'in connection with' was discussed in Burswood Management Ltd v A-G (1990) 23 FCR 144. In a joint decision the court said: 'The words "in connection with" are words of wide import; and the meaning to be attributed to them depends on their context and the purpose of the statute in which they appear.' This means that to be 'in connection with' the travel undertaken between the employee's usual place of residence and their usual place of employment, the transport provided by the employer does not have to be a 'door to door' service. It can form part of the overall travel undertaken providing the start and end points are the employee's usual place of employment and their usual place of residence. Therefore the return flights between the operating hubs and the employee's usual place of residence are 'in connection with the travel referred to in subparagraph (c)(ii)'. | Detailed Reasoning - Having regard to the location of the two places, is it unreasonable to expect the employee to travel to and from work on a daily basis?: It would be unreasonable to expect the employee to travel on a daily basis on work days between the employee's usual place of employment and their usual place of residence, having regard to the location of these places. | Detailed Reasoning - Conclusion: The requirements of subsection 47(7) are met and the provision of the fly-in fly-out travel is therefore exempt from fringe benefits tax as an exempt residual benefit.

The Employer specialises in a variety of transportation services including for bulk materials, general freight, and logistics solutions for the agriculture and mining sectors. | The Employer employs individuals, called Drivers, who drive large haulage transport and mobile plant vehicles, and operates with an approach that allows flexibility of movement of Drivers between all of its customers' locations. | Rosters for the Drivers are based on a number of days on and a number of days off, such as 16 days on, followed by 14 days off, for example (are not for the same days in consecutive weeks) and operate on a typical fly-in fly-out (FIFO) arrangement. Rosters for the Drivers confirm the true 'swing shift' nature of their work. The Drivers do not have any usual head office or other location that they report to when not rostered on for a shift. | Whilst the Drivers shifts are rostered, the final schedule is driven by the requirements of the customer and changes can be subject to several factors outside the control of the customer and or the Employer. | The Drivers are flown into and out of a location on a FIFO basis, as there are no other economically viable destination options available for the several remote locations where those employees will conduct their employment duties. The Employer could not successfully operate its business chartering expensive flights to multiple remote locations, so the decision was taken to fly employees in and out of home location, from where they may either pick up a large haulage vehicle to be driven out to remote locations, or they may have use a light vehicle for transport to their intended destination. | The vast majority of Driver's time is spent outside 100kms from a location, completing long haulage trips, collecting freight etc. | Drivers are provided accommodation as they travel around the different locations on a roster swing. Typically, this will be in motel style accommodation, or in camp style accommodation, such as at sites or remote stations. Sometimes, where no other accommodation is available, Drivers sleep in their vehicles, which are specifically equipped for such situations. | Reasons for decision: These reasons for decision accompany the Notice of private ruling for the entity. | This is to explain how we reached our decision. This is not part of the private ruling. | Question 1: Will the flights provided to the employees (Drivers) from a location to the operating hubs be exempt residual benefits pursuant to subsection 47(7) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?