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COVID-19 tests to become tax deductible

10 February 2022

covid 19workplace relations

The Federal Government has announced plans to introduce legislation that will make COVID-19 testing expenses tax deductible for individuals and businesses when used to attend a place of work.

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Under the legislation, COVID-19 tests will become tax-deductible for Australian individuals and exempt from fringe benefit tax (FBT) for businesses when purchased for work-related purposes (not for household or social reasons).

The amount an individual will get back is calculated by their tax rate, while the total cost of the test would be exempt from FBT for small businesses.

The Australian Tax Office notes these changes are not yet law, but in the interim, if you buy COVID-19 tests for work purposes, you should keep a record of those expenses.

Australian Treasurer Josh Frydenberg said: “We have also been working hard to make sure that Rapid Antigen Tests are available to workers, businesses and schools over the coming weeks and months.

“Since the start of 2022, the Government has secured more than 80 million Rapid Antigen Tests for delivery in January and February for use in Aged Care and other high-risk settings.

“Our government is also taking action to remove uncertainty around the tax treatment of these tests.

“We will ensure that COVID-19 testing expenses are tax deductible for testing taken to attend a place of work, giving businesses and individuals more clarity and assurance.

“We will also ensure that fringe benefits tax will not be incurred by employers where COVID-19 tests are provided to employees for this purpose.”

More information for business

Many businesses rely on rapid antigen testing for operational continuity. It’s quick and means workers can be screened in the workplace. Read about our top five issues to consider here.

Victorian Chamber workplace relations consultants have advised a number of businesses on the introduction of workplace policies, COVID-19 obligations and general advice on a range of workplace issues.

For assistance on any aspect of your employment obligations, please call the Victorian Chamber Workplace Relations Advice Line on (03) 8662 5222.

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