An expense payment fringe benefit may arise in two ways:

  • You (as an employer) reimburse an employee for expenses they incur
  • you (as an employer) pay a third party the expenses incurred by the employee

The taxable value of an expense payment fringe benefit is the amount you reimburse or pay the employee. This
taxable value may be reduced by the amount the employee would have been entitled to claim as an income tax
deduction if you had not reimbursed them. Reimbursements of telephone/mobile phone expenses are common
examples of expense payment fringe benefits.

Where this occurs you must obtain an employee declaration as to the business percentage for substantiation
purposes.