Policies and procedures

Policy No.
Financial Management
Authoring Organisational Unit
Finance - Central Unit
Date Approved
Next Review Date
Approving Body

The University of Western Australia

University Policy on: Travel Fringe Benefits Tax (FBT)

Purpose of the policy and summary of issues it addresses:

This policy governs the assessment and calculation of Fringe Benefits Tax on travel undertaken by University staff, which incorporates an element of private travel, based on legislative requirements.

In line with the University's Travel Policy, all University Travel must be processed through the University's Travel Requisitioning and Approval system.

The purpose of this policy is to:

Alert travellers to the FBT liability risk of combining private and business travel (including study and sabbatical leave).

It is not the intent of this Policy to provide a private benefit to employees of the University, nor is this Policy designed to encourage Employees to structure business travel to incorporate private days.

This policy should be read in conjunction with the University's Travel Policy. Staff should ensure they have read and understood the University's travel policy and procedures prior to undertaking any travel.

Examples of possible travel scenarios have been illustrated in Appendix A , to assist the traveller determine whether there could be an FBT liability.

Travel FBT Process Flow Chart


In this policy and any associated procedures,

Associate includes people closely associated with an employee, such as relatives or close friends

ATO means the Australian Taxation Office

Business day means any day spent undertaking formal business activities

exceeding three hours and includes but is not limited to:

  • Unavoidable delays between business activities
  • Transit days when travelling to or from a business destination
  • Up to two recovery days for long-haul [1] international travel (no recovery days considered necessary for domestic travel or short-haul international travel within Oceania [2] and Asia)
  • Weekends and public holidays falling within business activities (excluding weekend days falling between a travel and a business day - refer recovery day definition above)
  • Working from office or hotel where this work can be confirmed in writing by the Head of School
  • Official study/work days whilst on sabbatical/study leave

Dual purpose travel means travel which combines both business and private components

Employee means an employee of the University, including honorary and casual staff

Employee contribution means a repayment by an Employee to the University for private travel costs paid in advance by the University. Repayments must be made from the after tax income of the Employee.

Employer means the University of Western Australia, an associate of the University or a third party under an arrangement with the University

FBT means fringe benefits tax as defined by the Fringe Benefits Tax Assessment Act 1986

FBT Act means the Fringe Benefits Tax Assessment Act 1986

FBT rate means the FBT rate prescribed by the Fringe Benefits Tax Assessment Act 1986

Private day means any day not considered a business day, and includes but is not limited to:

  • University shut down period;
  • Days of booked recreation leave, time off in lieu and flexi days
  • Weekends or public holidays falling within private activities
  • Private travel days including time off in lieu and flexi days
  • Transit days when travelling to or from locations for private purposes
  • Sabbatical days not spent undertaking official study/work
  • Days prior to, or subsequent to, business activities where it was reasonably practicable for an employee to return home (excluding reasonable transit and recovery days)

Taxable value means the value of a fringe benefit used as a basis for calculating an FBT liability

The University means the University of Western Australia

Third party means a third party of the University

Transit Days are days spent travelling to/from business activities, such as meetings and conferences, except if the travel is to/from locations for personal purposes. Travel to/from locations for personal purposes are treated as Private Transit Day(s), which refers to the number of days when an employee is not travelling for business activities. Private Transit Day includes a stop off on the way or return from a business activity, where the stop off is not required for business reasons. Private Transit Days to be considered as Private Days.

Travel requisitioning system means the University's web-based Travel Requisitioning and Approval tool, as prescribed in the Travel Policy

Travel diary means a diary or similar document, either written or electronic, which includes an entry for each activity undertaken whilst travelling, setting out no less than the following particulars:

  • The place where the activity was undertaken;
  • The date when the activity commenced;
  • The duration of the activity; and
  • The nature of the activity.

Policy statement:

1 General Principles

1.1 The principles outlined in this Policy are integral to ensuring the University meets its obligations under the FBT Act.

1.2 The FBT Act does not define or provide guidance as to what is considered incidental private days, therefore the University policy is based on decisions from past case law and interpretative decisions from the ATO.

1.3 The approach to assessment and calculation of FBT adopted by the University is consistent with the general view agreed to amongst the Group of Eight Universities and the wider Australian University community.

1.4 FBT is calculated on the Taxable Value of a Fringe Benefit. Where expenditure is incurred by the University in relation to Dual Purpose Travel, the Employee is required to reimburse the private component of those funds to the University in accordance with Section 4. Refer Appendix B for an illustration of the calculation of FBT.

2 Assessment

2.1 The assessment of Dual Purpose Travel involves two tests (refer Appendix C ). FBT will be triggered under the following two tests:

2.1.1 "Private Days" Test

Travel by an Employee will be considered more than incidental and subject to FBT when the number of Private Days equals or exceeds the Business Days.

2.1.2 "Associate Travel" Test

Employer funded travel by an Associate of an Employee will be subject to FBT. For the avoidance of doubt, it is University policy NOT to fund travel of an Employee's Associate. Point 2.1.2 is included to cover the rare exceptions to the rule.

2.2 FBT is not applicable to student travel.

2.3 Externally funded travel (e.g. travel funded by a conference facilitator) booked and approved through the University travel booking system will be assessed for FBT in accordance with 2.1.

2.4 Where an Employee chooses to change their destination for Private purposes, they are required to pay 100% of the Private travel legs directly to the travel provider.

3 FBT Calculation

3.1 Where the Private Days test has determined that the private component of a trip is more than incidental, FBT will be calculated on 50% of the total airfare.

3.2 Where the Associate Travel Test has determined that an Associate of an Employee was travelling with an Employee for private purposes, FBT will be calculated on 100% of the Associate's total airfare.

3.3 The University will not pay FBT on Employee travel. Employee Contributions via reimbursement to the University are required to reduce the taxable value of Dual Purpose Travel to nil.

4 Employee Contribution

4.1 The University will only pay for the Business portion of a trip;

4.2 An Employee must pay an Employee Contribution equal to:

4.2.1 50% of the total University funded and/or externally funded airfare for Employee travel assessed under the Private Days test per item 2.1.1; or

4.2.2 100% of the total University funded and/or externally funded airfare for Associate travel assessed under the Associate Travel test per item 2.1.2.

4.3 Employee Contributions are payable by the Employee to the University in a manner prescribed by the University.

4.4 Employee Contributions must be made by the Employee reimbursing the University directly from after tax income and cannot be made directly from a consultancy fund.

4.5 Exceptions to item 4.1 and 4.2 are to be assessed and approved in accordance with the provisions outlined in University Policy UP07/216 "Bonus Payments".

Employee Contribution Process Flow Chart

5 Travel Diaries

5.1 A Travel Diary is to be completed by a traveller (refer Appendix D) where the following two conditions are met:

5.1.1 For domestic and international travel where the employee is away from their home for more than five consecutive nights; and

5.1.2 Where travel includes one or more Private Days [3].

5.2 Travel Diaries are not required where travel comprises 100% Business Days [4].

5.3 A lower level of detail is required for Travel Diaries where the traveller is undertaking long term travel such as sabbaticals and study leave. Travel Diaries for these types of travel are required to be made on a regular basis throughout the trip, and entries be made on at least a weekly basis. All private days must be specifically stated in the Travel Diary.

5.4 Travel Diaries must be completed no later than 30 days from the date the traveller returns from travel.

5.5 Travel Approvers will be notified where a traveller has failed to complete their Travel Diary within 30 days (per 5.4).

5.6 The University reserves the right to automatically impose FBT on travel where a travel diary has not been submitted in accordance with sections 5.1 - 5.5 of the Policy. FBT charges will be borne by the Employee's Business Unit and charges will be processed by Financial Services.

Travel Diary Process Flow Chart

Related forms: (Link)

TRIM File No:


Contact position:

Associate Director - Corporate Services

Financial Services

Related Policies or legislation:

University Policy on Travel (UP7/41)

[1] Definition of long-haul travel is an international flight exceeding 6 hours duration

[3] Refer Private Days under Definition section of Policy

[4] Refer Business Days in Definition section of Policy