Section CE 5 — Income Tax Act 2007: Meaning of expenditure on account of an employee

CE 5 Meaning of expenditure on account of an employee Meaning (1) Expenditure on account of an employee means a payment made by an employer relating to expenditure incurred by an employee or to be incurred by an employee. Inclusion (2) Expenditure on account of an employee includes a premium that an employer pays on a life insurance policy taken out for the benefit of the employee, or their spouse, civil union partner, de facto partner, or their child. This subsection is overridden by subsection (3)(f) to (i). Exclusions (3) Expenditure on account of an employee does not include— (a) expenditure for the benefit of an employee, or a payment made to reimburse an employee, under section CW 17 (Expenditure on account, and reimbursement, of employees): (b) an allowance for additional transport costs under section CW 18 (Allowance for additional transport costs): (bb) an amount paid under section CW 17B (Relocation payments) or section CW 17C (Payments for overtime meals and certain other allowances): (c) expenses that an employee pays in connection with their employment or service to the extent to which the expenditure is their employer’s liability, if the employee undertakes to discharge the liability in consideration of the making of the payment by the employer: (d) expenditure on an employment-related loan to which the fringe benefit tax (FBT) rules apply: (e) an employer’s superannuation contribution: (f) a premium that an employer pays on a life insurance policy taken out for the benefit of the employee, or their spouse, civil union partner, de facto partner, or their child, if— (i) the premium cannot be refunded to, or converted to cash by, the employee or an associated person; and (ii) the only benefits that are payable under the policy are those payable on the death of the employee, or their spouse, civil union partner, de facto partner, or their child, or those payable because of accident, disease, or sickness of the employee, or their spouse, civil union partner, de facto partner, or their child: (g) a premium that an employer that is a close company pays on a life insurance policy taken out for the benefit of the employee, or their spouse, civil union partner, de facto partner, or their child, to the extent to which the expenditure is treated as a dividend under subpart CD (Income from equity): (h) a premium that an employer pays on a life insurance policy taken out for the benefit of the employee, or their spouse, civil union partner, de facto partner, or their child, if the policy is, or is included in, a superannuation category 1 scheme, a superannuation category 2 scheme, or a superannuation category 3 scheme: (i) a premium that an employer pays on a life insurance policy taken out for the benefit of the employee, or their spouse, civil union partner, de facto partner, or their child, if the policy is held by or for the trustees of a superannuation category 3 scheme: (j) a premium for income protection insurance that an employer is liable to pay or make a contribution towards for the benefit of an employee. Defined in this Act: additional transport costs , associated person , close company , contribution , dividend , employee , employer , employer’s superannuation contribution , employment-related loan , expenditure on account of an employee , FBT rules , life insurance policy , pay , premium , superannuation category 1 scheme , superannuation category 2 scheme , superannuation category 3 scheme , trustee Compare: 2004 No 35 s CE 5 Section CE 5(1): replaced (with effect on 1 April 2008), on 2 November 2012 (applying for the 2008–09 and later income years), by section 11(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section CE 5(3)(bb): inserted (with effect on 1 April 2008), on 6 October 2009, by section 25 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).