Advise John whether the amounts or benefits he receives under the above transactions are assessable income to him
Question
Advise John whether the amounts or benefits he receives under the above transactions are assessable income to him
John is a student studying accounting at CSU.
The following information relates to the financial year ending 30 June 2013.
From 1 July 2012 to 31 January 2013, John works as a waiter at a local restaurant and is paid $18.00 per hour. He works 3 x 5 hour shifts each week. In addition, he often receives tips from diners. The amount he receives varies, but is generally between $30 – $50 each shift.
In September 2012, John’s employer gives him an “employee of the month” award. This award is given to an employee each month based on positive feedback received from customers. The award is a $200 bonus.
When John leaves the restaurant at the end of January 2013, his employer gives him a ‘farewell’ present. The present is an expensive bottle of champagne, valued at $150.
In February 2013, John starts a graduate position with an accounting firm in the Sydney CBD. His annual salary is $60,000 plus 9% compulsory superannuation. He signed the contract for the job in November 2012. He was offered a $2,000 sign-on bonus which was paid once he completed his first week of work. His employment contract states he can quit his job if 2 weeks’ notice is given.
In April 2013, the accounting firm pays John’s private health insurance ($1,200 for the period 1 April 2013 to 31 March 2014); and gym membership ($900 for the period 1 April 2013 to 31 March 2014).
At the request of his employer, John is undertaking a Masters of Taxation at CSU. In June 2013, his employer pays CSU $6,000 in fees associated with the course.
Required:
Advise John as to whether any of the amounts or benefits he receives under the above transactions are assessable income to him. Also identify the fringe benefits he has received (if any).
What is the accounting firm’s FBT liability in relation to the benefits provided to John (for the FBT year 1 April 2013 to 31 March 2014)?
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