FBT exemption for retraining and reskilling staff

Employer expenditure on retraining and reskilling redundant (or soon to be redundant) employees is exempt from FBT.

The education or training is not required to have any connection to the employee’s current income-earning employment. The expenditure can include course fees, seminar costs, travel, accommodation, textbooks, internal training sessions, external training courses, etc.

The FBT exemption applies if:

• The education or training is undertaken by an employee of an employer.
• The employee is redundant.
• The employer has complied with any obligation under the Fair Work Act 2009.
• The primary purpose of the education or training is to enable the employee to produce salary or wages.

Benefits provided under a salary packaging arrangement or benefits provided to certain related employees (and their relatives) are not eligible for the FBT exemption.