Certain terms have no effect—reasonable and not reasonable deductions
2.12 Certain terms have no effect—reasonable and not reasonable deductions
Reasonable deductions
For subsection 326(2) of the Act, a circumstance in which a deduction mentioned in subsection 326(1) of the Act is reasonable is that:
the deduction is made in respect of the provision of goods or services:
by an employer, or a party related to the employer; and
to an employee; and
the goods or services are provided in the ordinary course of the business of the employer or related party; and
the goods or services are provided to members of the general public on:
the same terms and conditions as those on which the goods or services were provided to the employee; or
on terms and conditions that are not more favourable to the members of the general public.
A deduction of health insurance fees made by an employer that is a health fund.
A deduction for a loan repayment made by an employer that is a financial institution.
For subsection 326(2) of the Act, a circumstance in which a deduction mentioned in subsection 326(1) of the Act is reasonable is that the deduction is for the purpose of recovering costs directly incurred by the employer as a result of the voluntary private use of particular property of the employer by an employee (whether authorised or not).
Examples of costs
1 The cost of items purchased on a corporate credit card for personal use by the employee.
2 The cost of personal calls on a company mobile phone.
3 The cost of petrol purchased for the private use of a company vehicle by the employee.
Deductions not reasonable
For subsection 326(2) of the Act, and subject to subregulations (1) and (2), a circumstance in which a deduction mentioned in subsection 326(1) of the Act is not reasonable is that the deduction is for an amount that may be varied from time to time.
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