Not-for-profit community

This community is designed to keep you up to date on the latest tax issues affecting the not-for-profit sector. It’s also an opportunity for you to ask questions, raise concerns and have your say on how we can improve our communication with you.

This community is designed to keep you up to date on the latest tax issues affecting the not-for-profit sector. It’s also an opportunity for you to ask questions, raise concerns and have your say on how we can improve our communication with you.

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  • With the introduction of Single Touch Payroll in a not for profit offering salary sacrifice fringe benefits (ultimately showing as reportable fringe benefits on payment summaries), what do we do with these deductions so as to ensure that our staff are not disadvantaged in the centrelink system? How do we get this set up correctly for single touch payroll to be able to recognize these amounts on a pay be pay basis when there seems to be no deduction in the ATO's list for RFBT amounts.

    Jennifer54 asked over 1 year ago

    Salary sacrificed amounts aren’t shown as income on payment summaries, this won’t change in STP. If the salary sacrifice amount attracts FBT it is shown as a Reportable Fringe Benefit Amounts (RFBA), this is also the case in STP. The extract below gives the rules for such a scenario in STP.

    The extract is taken from the Business Implementation Guide for STP. This guide contains the business rules and scenarios that will assist in understanding the business context surrounding the functionality of the design requirements of STP. The same information can be found on the ATO website in The rules of reporting through Single Touch Payroll.

    3.3.3 Reportable fringe benefit amount /Reportable employer superannuation contributions

    Where an employee receives RFBA or RESC amounts these may be reported through STP.

    Note: Reportable Fringe Benefits Amounts arising in an FBT year (1 April until 31 March) must be reported entirely within the financial year ending on the following 30 June (for example, for 1 July 2017 until 30 June 2018 Financial year include RFBA amounts from 1 April 2017 to 31 March 2018). RFBA from 1 April to 30 June are reported in the following financial year.

    The rules for reporting RFBA/RESC are:

    1. An employer may provide YTD RFBA and RESC through a pay event (if the information is available in payroll) throughout the financial year.

    2. An employer may provide YTD RFBA and RESC through an update event throughout the financial year.

    3. If reported during the year via a payroll or an update event the amounts should continue to be reported for each following pay event, even if the YTD amounts remain the same.

    4. Alternatively, the employer may report these amounts via an update event as a part of the finalisation process at the end of the financial year.

    5. If the employer cannot (or makes a choice not to) provide RFBA or RESC via STP, then they must provide this information on a payment summary to their employees and provide a payment summary annual report to the ATO. This payment summary must not include amounts reported through STP.

  • Are board members (who are solely volunteers) allowed to loan money to the non-profit charity for administration costs? if allowed, how would I make the payments back to the member as transparent as possible so it does not cause any confusion when it comes to Tax returns.

    CPalma asked over 1 year ago
    Generally speaking, board members of a non-profit charity may lend it funds for, say, administration costs, if its governing document allows for such arrangement. If allowed, then it should also state the method and means by which the lenders will be paid back, as well as the necessary records it must keep to account for such transactions. (The Record keeping fact sheet may assist the enquirer in determining the most appropriate and applicable records to generate and keep for the transaction in question).

    Such an arrangement should not be effected if the governing document is silent on the issue.

    Please contact the ATO NFP Advice line on 1300 130 248 if you wish to discuss the matter further.
  • How much money can a not for profit organisation hold in a bank account

    Danielle Dunshea asked about 2 years ago

    An NFP organisation can hold any amount of money in their bank account. The assumption though is that these moneys will be utilised solely to further the purposes for which the organisation was established. It is also possible for an NFP organisation’s governing rules to include a clause specifically addressing the issue of, say, how much can be held in their bank account in any given financial year.

    One must remember though that if the NFP organisation is not exempt from income tax, then any interests earnt in the account is taxable to the organisation. The reverse is true if the organisation is income tax exempt (either through self-assessment of formal endorsement from the ATO).

  • What is the major difference between rebateable employers and ones entitled to FBT concessions?

    FionaAnneMartin asked over 2 years ago

    The FBT concessions that may apply if the employer is a not-for-profit organisation include:

      • FBT exemption

      • FBT rebate

      • certain benefits provided by registered religious institutions and non-profit companies.

      • car parking

      • remote area concessions

    Therefore the FBT rebate is just one of the types of FBT concessions. Employers that are entitled to apply the FBT rebate are often called ‘rebateable employers’.

    Access to the different FBT concessions will depend upon the type of non-profit organisation.  For example Registered Charities are only entitled to access the FBT rebate but entities that are Hospitals, Registered Public Benevolent Institutions or Registered Health Promotion Charities are entitled to access the FBT exemption.

    For more detailed information see the links below: