Private ruling: FBT and exempt residual benefit
Date of advice: 13 October 2025
Published: 1 December 2025
Ruling period: Fringe Benefits Tax (FBT) Year Ending 31 March 20XX | FBT Year Ending 31 March 20XX | FBT 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: Does the proposed provision of flights to employees between their usual place of residence and the transportation hub constitute an exempt residual benefit 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 40 | 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 subsection 140

Reasons for decision: Summary: The provision of flights to the employees between their usual place of residence and the transportation hub will constitute exempt residual benefits pursuant to subsection 47(7) of the FBTAA. | Detailed Reasoning - Detailed reasoning: The provision of the flights, under a salary sacrifice arrangement, will give rise to a 'benefit' as defined in subsection 136(1) of the FBTAA. The benefit will be a fringe benefit where it meets the definition of 'fringe benefit' as defined in subsection 136(1) of the FBTAA. The definition of 'fringe benefit' in subsection 136(1) of the FBTAA excludes at paragraph (g) a benefit that is an 'exempt benefit' in relation to the year of tax. For the purposes of this ruling, the relevant exemption is the exemption provided under subsection 47(7) of the FBTAA for a residual benefit that consists of the provision of Fly-in Fly-out (FIFO) transport. | Detailed Reasoning - Is the benefit a 'residual benefit?': As section 47 of the FBTAA provides an exemption for residual benefits that consist of the provision of FIFO transport, it is necessary to consider whether the benefit is a 'residual benefit.' Section 45 of the FBTAA 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). Divisions 2 to 4 and 6 to 10 are not relevant to this scheme. Division 5 and Division 11 may be relevant to this scheme. | Detailed Reasoning - Expense payment benefits: Division 5 applies to expense payment fringe benefits. Section 20 of the FBTAA states that an 'expense payment benefit' will arise where the provider either: a) makes a payment in discharge, in whole or in part, of an obligation of another person (the recipient) to pay an amount to a third person in respect of an amount of expenditure incurred by the recipient; or b) reimburses the recipient, in whole or in part, in respect of an amount of expenditure incurred by the recipient. The cost of the flights will be paid for by the Employer. Therefore, the Employer is not discharging an obligation of another person to pay a third person, nor providing a reimbursement to another person in respect of expenditure incurred by that person. The benefit is therefore not an 'expense payment benefit' pursuant to section 20 of the FBTAA. | Detailed Reasoning - Property benefits: Division 11 applies to property fringe benefits. Section 40 of the FBTAA states: 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 provides the following definitions relevant to property benefits: property' means: (a) intangible property; and (b) tangible property. 'tangible property' means goods and includes: (a) animals, including fish; and (b) gas and electricity.' 'intangible property' means: (a) real property; (b) a chose in action; and (c) any other kind of property other than tangible property; but does not include: (d) a right arising under a contract of insurance; or (e) a lease or licence in respect of real property or tangible property. 'property benefit' means a benefit referred to in section 40, but does not include a benefit that is a benefit by virtue of a provision of Subdivision A or Divisions 2 to 10 (inclusive) of Part III. The term 'goods' is not defined in the FBTAA and therefore takes its ordinary meaning. The Macquarie Dictionary Online defines the term 'goods' relevantly at paragraphs 1 and 2 as: 1. (plural) possessions, especially movable effects or personal belongings. 2. (plural) articles of trade; wares; merchandise, especially that which is transported by land. ... The flights do not meet the definition of 'goods' and is therefore not 'tangible property.' Paragraph (e) of the definition of 'intangible property' in subsection 136(1) of the FBTAA relevantly excludes leases or licenses in respect real property or tangible property. 'Licence' is not defined in the FBTAA, the Income Tax Assessment Act 1936 (ITAA 1936) or the Income Tax Assessment Act 1997 . It therefore takes on its ordinary meaning. The Macquarie Dictionary defines the term 'licence' (as relevant here) as: licence noun 1. formal permission or leave to do or not to do something. 2. formal permission from a constituted authority to do something, as to carry on some business or profession, to be released from jail for part of one's sentence under specific restrictions, etc. 3. a certificate of such permission; an official permit. ... The flights provide the employee with the formal permission to receive transport on the plane and is therefore not intangible property. As the flights are neither tangible nor intangible property, the provision of the ticket is not a property benefit. Therefore, the benefit provided by the Employer does not fall within any of the provisions of Subdivision A of Divisions 2 to 11 of Part III of the FBTAA and as such is a residual benefit per section 45 of the FBTAA. | Detailed Reasoning - Is the benefit exempt under subsection 47(7) of the FBTAA?: As the benefit is a residual benefit, consideration needs to be given as to whether the benefit is an exempt residual benefit under subsection 47(7) of the FBTAA. Section 47 of the FBTAA establishes exempt residual benefits. Subsection 47(7) of the FBTAA 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 Employer's circumstances to determine whether the provision is satisfied so that the provision of the FIFO travel is an exempt residual benefit. | Detailed Reasoning - Is the employee's usual place of employment at a location in a State or internal Territory but not in, or adjacent to, an eligible urban area?: Usual place of employment Paragraph 47(7)(1)(a) of the FBTAA requires there to be a usual place of employment. Subsection 136(1) of the FBTAA defines 'employment' as follows: 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 employees is the site that they can be rostered to attend to perform the services as agreed under their employment contract. The eligibility criteria in relation to subparagraph 47(7)(a)(ii) of the FBTAA should be considered in its entirety such that the employees have a defined usual place of employment (i.e. the mine site). 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) of the FBTAA will be satisfied. 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 ITAA 1936 for income tax purposes). Paragraph 140(1)(b) of the FBTAA 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 site is located 400 kilometres away from the closest town. No employee has a usual place of residence sufficiently proximate to the mine site. Therefore, the employees' 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 employees are provided with accommodation at or near the mine site on working days. The accommodation is maintained by the Employer for the exclusive use of its employees during their roster period at the mine. 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? Employees have fixed rosters where they work for a number of days on and have a number of days off. On completion of the work days, the employees travel from the usual place of employment (i.e. the mine site) to his or her usual place of residence. On completion of their leave, the employee returns from his or her usual place of residence to the 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 employees are provided with transport (arranged and paid for by the Employer) on a regular basis, being flights between their home location and the relevant transportation hub. The Employer then provides additional flights to transport the employees between the transportation hub and the site, although these additional flights are not being considered for the purposes of this ruling. In looking at whether the transport provided to an employee by the Employer, being the flights between their home location and the transportation hub, 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 provided 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 transportation hub and the employee's usual place of residence are 'in connection with' the travel referred to in subparagraph 47(7)(c)(ii) of the FBTAA. | 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) of the FBTAA are met and the provision of the FIFO travel is therefore exempt from fringe benefits tax as an exempt residual benefit.

1. The Employer employs a number of non-local workers on a Fly-In-Fly-Out (FIFO) basis, that is the employees reside in their own homes and fly to the site on roster. | 2. Because of the remote location, employees work on a FIFO basis, with a regular roster stipulating an agreed number of days ' on ' and subsequent days ' off '. For example, by agreement with the Employer, an employee might work a regular roster of (inter alia): | (a) 14 days ' on ' followed by 7 days ' off ''; or | (b) 14 days ' on ' followed by 14 days ' off ''; | (c) 7 days ' on ' followed by 7 days ' off ''. | 3. On completion of each working shift, the employees must leave the mine site and return to their usual place of residence. | 4. On completion of each leave shift, the employees return from their usual place of residence to the mine site. | 5. Employees commence their 'on' shift from the time they arrive at the transportation hub. | 6. The Employer provides its employees with residential accommodation 'at or near' the work site. | 7. The employees live at various locations throughout Australia. Many of the employees live in states and in some cases, they live outside Australia. As such, employees are required to make their own way to the transportation hub. Currently, the employees cover their own costs for the flights between their usual place of residence and the transportation hub. | 8. For these employees, the Employer proposes to arrange and pay for flights: | (a) from the employees usual place of residence to the transportation hub, prior to the commencement of each regular ' on ' swing; and | (b) from the transportation hub to the employee's usual place of residence, following completion of the ' on ' swing. | 9. The cost of such flights would then be deducted from the employees' salary under a salary sacrifice arrangement. | 10. The Employer proposes to arrange and pay for the flights in the following manner: | (a) the employee will research and decide upon an apposite flight and inform the Employer of the date, time and flight number of the flight; | (b) The Employer (or its arranger) will book the flight directly with the flight provider; | (c) the flight provider will invoice the Employer (or its arranger) directly; | (d) The Employer will pay for the flight using its corporate card or by other means including by Electronic Fund Transfer deposit; and | (e) an equivalent amount is to be deducted from the salary of the benefitting employee. | 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. | Issue: Fringe Benefits Tax - Exempt residual benefit