Private ruling: FBT - employee benefits card
Date of advice: 21 November 2025
Published: 12 January 2026
Ruling period: Fringe Benefits Tax Assessment Act (FBTAA) Year Ending 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: Is the provision of the Employee Benefits Card by the Employer to an employee a 'fringe benefit' in accordance with subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)? | A1: No. | Q2: Is the provision of goods to an employee, facilitated via an Employee Benefits Card, a fringe benefit in accordance with subsection 136(1) of the FBTAA? | A2: Yes. | Q3: Is the provision of goods to an employee, facilitated by an Employee Benefits Card, an 'in-house property fringe benefit' in accordance with subsection 136(1) of the FBTAA? | A3: Yes. | Q4: Is the taxable value of the in-house property fringe benefits being provided to employees calculated pursuant to subsection 42(1)(b) of the FBTAA as an amount equal to the lesser of: • the arm's length price in respect of the acquisition of the recipient's property by the providers, or • the notional value of the recipient's property at the provision time? | A4: Yes. | Q5: If the answer to Question 4 is yes, can the Employer adopt the approach set out in paragraph 42(1)(c) of the FBTAA, which calculates the taxable value at 75% of the notional value? | A5: No. | Q6: Will the aggregate taxable value of in-house property fringe benefits provided to a particular employee during the FBT year be able to be reduced by up to $1,000 in accordance with section 62 of the FBTAA? | A6: Yes.


Relevant legislative provisions: Fringe Benefits Tax Assessment Act 1986 Section 40 | Fringe Benefits Tax Assessment Act 1986 Section 41 | Fringe Benefits Tax Assessment Act 1986 Subparagraph 42(1)(a)(ii) | Fringe Benefits Tax Assessment Act 1986 Paragraph 42(1)(b) | Fringe Benefits Tax Assessment Act 1986 Section 62 | Fringe Benefits Tax Assessment Act 1986 Subsection 136(1) | Fringe Benefits Tax Assessment Act 1986 Subsection 148(1) Taxation Ruling TR 1999/10 | ATO Interpretative Decision ATO ID 2014/17

Reasons for decision: Detailed Reasoning - Question 1: Is the provision of the Employee Benefits Card by the Employer to an employee a 'fringe benefit' in accordance with subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)? | Summary: No. The provision of the Employee Benefits Card to an employee is not a fringe benefit when issued. It is an administrative aid in facilitating the later provision of goods to the employee, which is a fringe benefit when the employee redeems the card for goods (explained further at Q2). | Detailed Reasoning - Detailed reasoning: To meet the definition of 'fringe benefit' in subsection 136(1) of the FBTAA, a 'benefit' must first be provided. 'Benefit' is defined in subsection 136(1) of the FBTAA as including: any right (including a right in relation to, and an interest in, real or personal property), privilege, service or facility and, without limiting the generality of the foregoing, includes a right, benefit, privilege, service or facility that is, or is to be, provided under: • an arrangement for or in relation to: - the performance of work (including work of a professional nature), whether with or without the provision of property; ... Subsection 136(1) of the FBTAA defines 'provide', in relation to property, to mean dispose of (whether by sale, gift, declaration of trust or otherwise) the beneficial interest in property or the legal ownership of property. ATO Interpretative Decision (ATO ID) 2014/17 fringe benefits tax - property fringe benefits: redemption of voucher/coupon by a retail store employee for merchandise retailed by their employer considers the FBT implications of an employer providing their employees with a voucher or coupon entitling the employee to goods that the employer sells to the public. This ATO ID confirms that an employer does not provide a fringe benefit when the voucher is granted. Rather, the employer provides the employee with an in-house property fringe benefit when the employee subsequently redeems the voucher/coupon for goods. Given the Employee Benefits Card is like a voucher/coupon, is non-transferable and is provided by the Employer to its employees to facilitate the provision of goods that the Employer and its subsidiary sells to the public, it is not a fringe benefit because it neither meets the definition of 'benefit' nor 'provide' in subsection 136(1) of the FBTAA. It subsequently doesn't meet the definition of 'fringe benefit' under subsection 136(1) of the FBTAA. Provision of the Employee Benefits Card is considered an administrative aid for facilitating the later provision of goods to the employee. As such, it is not considered by itself to be a benefit that is being provided. Provision of a benefit only occurs upon redemption of the Employee Benefits Card by an employee in exchange for goods. This view is consistent with Taxation Ruling TR 1999/10: Income tax and fringe benefits tax: Members of Parliament - allowances, reimbursements, donations and gifts, benefits, deductions and recoupments which provides the following: 22. On 'retirement' from Federal Parliament, Members may be issued with either a Life Gold Pass or a Severance Pass which may entitle the holder of the pass and his or her spouse to travel benefits. Similar travel entitlements are available for Members of State and Territory Parliaments. 23. We consider that the issuing of a Life Gold Pass or Severance Pass has no income taxation implications. The value of travel benefits received through the use of these passes does not form part of either a Member's or a Member's spouse's assessable income. However, travel benefits received from the use of a Life Gold Pass or Severance Pass are residual fringe benefits and the provider of the pass may be subject to fringe benefits tax when the passes are used for travel (paragraphs 84 to 88). 86. We do not consider that the issuing of passes under the Life Gold Pass and Severance Pass Schemes attracts any income tax implications. However, travel benefits received in relation to each use of a Gold Pass or Severance Pass by a Member will be taxed as a residual benefit, within the meaning of section 45 of Division 12 of the FBTAA, to the provider of the pass. It differs from the view contained in ATO ID 2010/135 Fringe Benefits Tax - Property fringe benefits: gift cards, where provision of a gift card to employees was considered a fringe benefitbecause the gift cards could be used by any person (bearer) who holds it and if the gift card is lost or stolen, it cannot be replaced and may still be used by whoever holds it (i.e. use of the card was not limited to employees only). Whilst the Employee Benefits Card issued by the Employer to its employees has characteristics similar to that of a 'gift card' or 'gift voucher' that is sold to the general public, Employee Benefits Cards can be distinguished in that they cannot be transferred to any other person. Employee Benefits Cards can only be used by the employee to obtain goods which are also sold by the employer to the public (with some exceptions). | Detailed Reasoning - Question 2: Is the provision of goods to an employee, facilitated via an Employee Benefits Card, a 'fringe benefit' in accordance with subsection 136(1) of the FBTAA? | Summary: Yes. The provision of goods via redemption of the Employee Benefits Card constitutes a 'fringe benefit' in accordance with the definition in subsection 136(1) of the FBTAA. | Detailed Reasoning - Detailed reasoning: A 'fringe benefit' is defined in subsection 136(1) of the FBTAA, as: • A benefit provided at any time during the year of tax. • The benefit provided to an employee or an associate of the employee. • The benefit provided by: - the employer; or - an associate of the employer; or - a person other than the employer or an associate of the employer under an arrangement between the employer or associate of the employer and the other person. - a person other than the employer or an associate of the employer, if the employer or an associate of the employer participates in or facilitates the provision or receipt of the benefit. • The benefit is provided in respect of the employment of the employee. • The benefit is not one that is specifically excluded as per paragraphs (f) to (s) of the definition of a fringe benefit in subsection 136(1) of the FBTAA. | Detailed Reasoning - A benefit is provided: Subsection 136(1) of the FBTAA provides a broad definition of a 'benefit' as including: any right (including a right in relation to, and an interest in, real or personal property), privilege, service or facility and, without limiting the generality of the foregoing, includes a right, benefit, privilege, service or facility that is, or is to be, provided under: • an arrangement for or in relation to: - the performance of work (including work of a professional nature), whether with or without the provision of property; ... 'Provide' in relation to a benefit is defined in subsection 136(1) of the FBTAA as allow, confer, give, grant or perform. In this case, a benefit is provided when an employee redeems their Employee Benefits Card for goods. | Detailed Reasoning - The benefit is provided to an employee or an associate of the employee: An 'employee' is defined in subsection 136(1) of the FBTAA to mean a current, future or former employee. Based on the facts provided, the benefit will only be provided to employees and therefore this condition is satisfied. | Detailed Reasoning - The benefit is provided by an employer, an associate of the employer or a third party: 'Employer' is defined in subsection 136(1) of the FBTAA to mean a current, future or former employer. In this case, as the benefit is provided by the employer, the third condition of the definition of 'fringe benefit' as defined in subsection 136(1) of the FBTAA is satisfied. | Detailed Reasoning - The benefit is provided in respect of the employment of the employee: As per subsection 136(1) of the FBTAA, 'in respect of' in relation to the employment of an employee includes by reason of, by virtue of, or for or in relation directly or indirectly to, that employment. Given the current circumstances, the connection between the benefits that would be received by an employee and their employment would indicate that the benefit is provided in respect of their employment. The benefits will be provided to employees because of entering into a new enterprise agreement. If it were not for an employee's employment with the employer, the employee would not be entitled to access the benefit. As such, the fourth condition (i.e. a benefit is provided in respect of the employment of the employee) of the definition of a 'fringe benefit' as defined in subsection 136(1) of the FBTAA is satisfied. | Detailed Reasoning - Not specifically excluded: For the purposes of this ruling, it has been assumed that the benefit is not an exempt benefit under section 58P of the FBTAA, as it's assumed its taxable value is more than $300 and it's not unreasonable to treat the benefit as a fringe benefit. It is also assumed the benefit is not exempt under section 41 of the FBTAA as it is assumed the property being provided will not be consumed on the employee's premises. Given that all conditions of the 'fringe benefit' definition in subsection 136(1) have been met, the benefit is a considered a 'fringe benefit'. We now have to determine what type of 'fringe benefit' it is. | Detailed Reasoning - Property fringe benefit: Section 40 of the FBTAA defines a 'property fringe benefit' as: "Where, at a particular time, a person (in this section referred to as the provider) provides property to another person (in this section referred to as the recipient), the provision of the property shall be taken to constitute a benefit provided by the provider to the recipient at that time." Subsection 136(1) of the FBTAA defines 'provider' as 'the person who provides the benefit' and defines 'recipient' in relation to a benefit to mean the person to whom the benefit is provided. 'Property' is defined in subsection 136(1) of the FBTAA to mean intangible property and tangible property. 'Tangible property' is defined in subsection 136(1) of the FBTAA to mean goods. The term 'goods' is not defined in the FBTAA and therefore takes on its ordinary meaning. 'Goods' is defined in the Macquarie Dictionary (online) as: • possessions, especially movable effects or personal belongings. • articles of trade; wares; merchandise, especially that which is transported by land. In this case, the goods being provided are articles of trade and as such, meet the section 40 of the FBTAA definition of 'property fringe benefit'. | Detailed Reasoning - Question 3: Is the provision of goods to an employee, facilitated by an Employee Benefits Card, an 'in-house property fringe benefit' in accordance with subsection 136(1) of the FBTAA? | Summary: Yes. The provision of goods via redemption of the Employee Benefits Card by the Employer to an employee is an 'in-house property fringe benefit' as defined in subsection 136(1) of the FBTAA. | Detailed Reasoning - Detailed reasoning: As outlined above, the provision of goods via redemption of the Employee Benefits Card by the Employer to an employee is a 'property fringe benefit' under section 40 of the FBTAA. Under the FBTAA, a property fringe benefit can either be 'in-house' or 'external'. An 'in-house property fringe benefit' is defined in subsection 136(1) of the FBTAA as follows: in-house property fringe benefit, in relation to an employer, means a property fringe benefit in relation to the employer in respect of tangible property; • where both of the following conditions are satisfied: - the provider is the employer or an associate of the employer; and - at or about the provision time, the provider carried on a business that consisted of or included the provision of identical or similar property principally to outsiders; or • where all of the following conditions are satisfied: - the provider is not the employer or an associate of the employer; - the property was acquired by the provider from the employer or an associate of the employer (which employer or associate is in this definition called the seller); and - at or about the provision time, both the provider and the seller carried on a business that consisted of or included the provision of identical or similar property principally to outsiders. An 'external property fringe benefit' is defined in subsection 136(1) of the FBTAA to mean, in relation to an employer, a property fringe benefit other than an in-house property fringe benefit. As the Employer is the provider of the 'property fringe benefit', is the employer, and carries on a business that consists of the provision of identical or similar property (goods) principally to outsiders, the benefit is an 'in-house property fringe benefit' under paragraph 136(1) (a) of the FBTAA. | Detailed Reasoning - Question 4: Will the taxable value of in-house property fringe benefits can be calculated pursuant to a subsection 42(1)(b) as an amount of equal to the lesser of: | Summary: Yes. The taxable value of the in-house property fringe benefit will be calculated under paragraph 42(1)(b) of the FBTAA where the benefit being provided to employees relates to goods that are acquired by the Employer. For the purposes of this ruling, it is assumed that all the goods being provided to employees are not manufactured, produced or processed by the Employer. The taxable value of the in-house property fringe benefit will then be able to be reduced by the reduction amount as specified in section 62 of the FBTAA (see response to Question 6 for further details). | Detailed Reasoning - Detailed reasoning: The taxable value of the property fringe benefit depends upon whether the benefit is an in-house property fringe benefit or an external property fringe benefit. As outlined at Question 3, the benefit being provided to employees is an in-house property fringe benefit. The taxable value of an in-house property fringe benefit is calculated under section 42 of the FBTAA. | Detailed Reasoning - Subsection 42(1) of the FBTAA provides that:: Subject to this Part, the taxable value of an in-house property fringe benefit in relation to an employer in relation to a year of tax, is: • if the recipient's property was provided to the recipient under a salary packaging arrangement - an amount equal to the notional value of the recipient's property at the provision time; or • if paragraph (aa) does not apply and the benefit is an airline transport fringe benefit - an amount equal to 75% of the stand-by airline travel value of the benefit at the time the transport starts; or • if neither paragraph (aa) nor (ab) applies and the recipient's property was manufactured, produced, processed or treated by the provider: - if identical property that was manufactured, produced, processed or treated, as the case may be, by the provider was, at or about the provision time, sold by the provider in the ordinary course of business to purchasers being manufacturers, wholesalers or retailers - an amount equal to: o if any of that identical property was, at or about the provision time, sold by the provider under an arm's length transaction or arm's length transactions - the lowest price at which it was sold under such a transaction; or o if sub-subparagraph (A) does not apply - the lowest price at which any of that identical property could reasonably be expected to have been sold by the provider at or about the provision time under an arm's length transaction; or - if subparagraph (i) does not apply but identical property that was manufactured, produced, processed or treated, as the case may be, by the provider was, at or about the provision time, sold by the provider: o in the ordinary course of business to members of the public under an arm's length transaction or arm's length transactions; and o in similar circumstances and subject to identical terms and conditions (other than as to price) as those that applied in relation to the provision of the recipient's property to the recipient; • an amount equal to 75% of the lowest price at which that property was so sold to a member of the public; or - in any other case - an amount equal to 75% of the notional value of the recipient's property at the provision time; or • if none of the above paragraphs applies and the property was acquired by the provider - an amount equal to the lesser of: - the arm's length price in respect of the acquisition of the recipient's property by the provider; or the notional value of the recipient's property at the provision time; or • in any other case - an amount equal to 75% of the notional value of the recipient's property at the provision time; reduced by the amount of the recipient's contribution. • The FBTAA does not define the meaning of 'acquired'. Its ordinary meaning must therefore be considered. The Macquarie Dictionary (online) defines 'acquire' as: | Detailed Reasoning - • to come into possession of; get as one's own.: Subsection 42(2) of the FBTAA provides that in subsection (1), arm's length price , in respect of the acquisition of the recipients property by the provider, means: - if the recipients property was acquired by the provider in the ordinary course of business under an arm's length transaction - the cost price of the recipients property to the provider; or - in any other case - the amount that the provider could reasonably be expected to have been required to pay to acquire the recipients property under an arm's length transaction in the ordinary course of business. | Detailed Reasoning - Subsection 136(1) defines 'notional value' as:: notional value , in relation to the provision of property or another benefit to a person, means the amount that the person could reasonably be expected to have been required to pay to obtain the property or other benefit from the provider under an arm's length transaction. Guidance for determining this amount is provided by Taxation Determination TD 93/231 Fringe benefits tax: what is an acceptable method for determining the 'notional value' of a property fringe benefit for the purposes of sections 42 and 43 of the Fringe Benefits Tax Assessment Act 1986? (TD 93/231). Paragraphs 2 - 5 of TD 93/231 state: • To ascertain the 'notional value' of a property fringe benefit the employer must determine the amount the employee would have to pay for a comparable (on the basis of age, type and condition) benefit under an arm's length transaction. • The ATO will accept a number of ways of obtaining the notional value including: - the price of comparable goods advertised in local newspapers and/or relevant magazines or similar publications, - the price paid for comparable goods at a public auction, - the price of comparable goods at a second-hand store, or - the market value of the goods determined by a qualified valuer. • The lowest value obtained using any of these methods will be acceptable. • Valuation methods which are not acceptable to this Office include the lease residual value, the tax written value or the 'best offer' made by an employee. In Walstern v. Federal Commissioner of Taxation [2003] FCA 1428; (2003) 138 FCR 1; 2003 ATC 5076; (2003) 54 ATR 423, Hill J in discussing notional value stated at ATC 5092: As already noted, the valuation formula depends upon the 'notional value' in relation to the provision whether of property or of a benefit to each of the Medichs. From the definition it follows that the question to be asked is what is the amount that each of the Medichs could reasonably be expected to have been required to pay to obtain the benefit from the provider under an arm's length transaction. The provider in the present case is Walstern. Hence the question in relation to Mr Ronald Medich, is how much he could reasonably be expected to have been required (i.e., by Walstern) to pay to Walstern to obtain the interest obtained by him in the fund, assuming the transaction between Walstern and him to be at arm's length. 'Recipient's contribution' is defined in subsection 136(1) of the FBTAA as: • in relation to a car parking fringe benefit, a property fringe benefit, a residual fringe benefit or a board fringe benefit, being a fringe benefit provided in respect of the employment of an employee of an employer, means the amount of any consideration paid to the provider or to the employer by the recipient or by the employee in respect of the provision of the recipients parking, the recipients property, the recipients benefit or the recipients meal, as the case may be, reduced by the amount of any reimbursement paid to the recipient in respect of that consideration; and... In this case, paragraphs (aa), (ab) and (a) of subsection 42(1) of the FBTAA do not apply, as the benefits are not provided under a salary packaging arrangement, are not airline transport fringe benefits or, for the purposes of this ruling, are not goods manufactured, produced, processed or treated by the Employer. As these paragraphs don't apply and the goods being provided to employees will be acquired by the Employer, taxable value is calculated in accordance with paragraph 42(1)(b) of the FBTAA, that is, taxable value will be the lessor of the arm's length price in respect of the Employer's acquisition of the goods that was provided to an employee under the Employee Benefits Card, or the notional value of those goods. Given the arm's length, price of the goods paid by the Employer will always be less than their notional value, the taxable value of the goods will be calculated as per subparagraph 42(1)(b)(i) of the FBTAA. For completeness, paragraph 42(1)(c) of the FBTAA doesn't apply to the goods provided to employees because paragraph 42(1)(b) does. | Detailed Reasoning - Question 5: If the answer to Question 4 is yes, can the Employer adopt the approach set out in paragraph 42(1)(c) of the FBTAA, which calculates the taxable value at 75% of the notional value? | Summary: No. Neither the Commissioner nor an employer has discretion as to which method can be used to calculate the taxable value of in-house property fringe benefits. Paragraph 42(1)(c) of the FBTAA can only be used when all of the other paragraphs in section 42(1) of the FBTAA do not apply. In this case, paragraph 42(1)(b) of the FBTAA applies, so paragraph 42(1)(c) of the FBTAA cannot be used. | Detailed Reasoning - Detailed reasoning: The taxable value of an in-house property fringe benefit is calculated under section 42 of the FBTAA. The method that must be used depends on the applicable circumstances. The Commissioner or an employer has no discretion on which method to use. As outlined in Question 4, paragraph 42(1)(b) of the FBTAA applies because the Employer will acquire goods that will be provided to their employees. As such, the Employer must use this method to calculate the taxable value of the in-house property fringe benefits they provide to employees. The method outlined in paragraph 42(1)(c) of the FBTAA (or any of the other methods) cannot be used because it's less of an administrative burden (or for any other reason), even if the taxable value ends up being higher than what would be payable using the paragraph 42(1)(b) of the FBTAA method. The method that applies to your circumstances must be used. | Detailed Reasoning - Question 6: Will the taxable value of in-house property fringe benefits provided to a particular employee during the FBT year be able to be reduced up to $1,000 in accordance with section 62 of the FBTAA? | Summary: Yes. Where one or more in-house property fringe benefits in relation to an employer in relation to a year of tax relate to a particular employee of the employer, the taxable value of that fringe benefit, or the sum of the taxable values of those fringe benefits in relation to that year shall be reduced by; • if the taxable value or the sum of the taxable values does not exceed $1,000 - an amount equal to the taxable value or the sum of the taxable value; or • in any other case - $1,000. | Detailed Reasoning - Detailed reasoning: Where an employer provides one or more in-house fringe benefits to a particular employee, the aggregate taxable value of those in-house fringe benefits may be reduced under section 62 of the FBTAA. Section 62 states: 62(1) Where one or more in-house fringe benefits in relation to an employer in relation to a year of tax relate to a particular employee of the employer, the taxable value of that fringe benefit, or the sum of the taxable values of those fringe benefits, as the case may be, in relation to that year shall be reduced by: • if the taxable value or the sum of the taxable values does not exceed $1,000 - an amount equal to the taxable value or the sum of the taxable values; or • in any other case - $1,000. 62(2) Subsection (1) does not apply to an in-house fringe benefit provided under a salary packaging arrangement.As explained at Question 3, the benefit being provided to employees is an 'in-house property fringe benefit'. As such, subsection 62(1) of the FBTAA will apply so that the aggregate taxable value of the in-house property fringe benefits for each employee is reduced by up to $1,000 per FBT year. As the Employee Benefits Card won't be provided to employees under a salary packaging arrangement, subsection 62(2) of the FBTAA, which prevents the taxable value of an in-house property fringe benefit from being reduced, does not apply.

• The Employer is considering an arrangement where employees will receive a Gift Card (to be referred to as an Employee Benefits Card). | • Employees will also receive an additional Employee Benefits Card for each of the next two years that the Enterprise Agreement is in place. | • The Employee Benefits Card will be specifically designed for use by employees only and will feature clear messaging that use is restricted to the employee cardholder only. | • The Employee Benefits Card will be restricted to use only at the Employer and its subsidiary's stores. | • The Employee Benefits Card will carry terms and conditions that stipulate that it is non-transferable and for employee use only. | • No goods or property subject to this ruling are provided to, and consumed by, employees on a working day and on business premises of the employer. | • The minor benefits exemption under s 58P of the FBTAA doesn't apply. | • The goods being provided to employees upon redemption of the Employee Benefits Card are not manufactured, produced, processed or treated by the Employer. | Reasons for decision: These reasons for decision accompany the Notice of private ruling for the Employer. | This is to explain how we reached our decision. This is not part of the private ruling .