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Employee reimbursements and GST

Business owners registered for GST may be able to claim GST credits for an employee-reimbursed expense. A reimbursement occurs when a business repays an employee for the price (or part of the price) of a purchase they have made.

There are three conditions that an owner must meet in order to claim GST credits:

To substantiate the claim, the owner must also be able to provide the relevant receipts or tax invoices issued to the employee. However, business owners need to be aware that they may be liable to Fringe Benefits Tax (FBT) when items are purchased for personal use or the purchase is part of non-cash employee benefits.

Business owners cannot claim GST credits for employee allowances, non-deductible expenses and reimbursed expenses that contribute to the running of the business that exceed the financial purchases threshold.

Posted on 22 July '15 by , under Tax.

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Superfund categories and what they mean

There are four different categories of super funds. These have different primary features and are more applicable to certain people than they are to others.

Retail super funds

Anyone can join retail funds. They are mostly run by banks and investment companies:

  • Allow for a wide range of investment options.
  • Financial advisors may recommend this type of fund as they receive commissions or might get paid fees for them.
  • Although they usually range from medium to high cost, there may be low-cost alternatives.
  • The companies that own these funds will aim to keep some of the profit they yield

Industry super funds

Anyone can join bigger industry funds, but smaller ones may only be open to people in certain industries i.e. health.

  • Most are accumulation funds but some older ones may have defined benefit members
  • Range from low to medium cost
  • Not-for-profit, so all profits are put back into the fund

Public sector super funds

Only available for government employees

  • Employers contribute more than the 9.5% minimum
  • Modest range of investment choices
  • Newer members are usually in an accumulation fund, but many of the long-term members have defined benefits
  • Low fees
  • Profits are put back into the fund

Corporate super funds

Arranged by employers for employees. Large companies may operate corporate funds under the board of trustees. Some corporate funds are operated by retail or industry funds, but availability is restricted to employees

  • If managed by bigger fund, wide range of investment options
  • Older funds have defined benefits, but most are accumulation funds
  • Low to medium costs for large employers, could be high cost for small employers

Self-managed super funds

Private super fund you manage yourself. Many more nuances to this type of fund. Most prominent feature is the autonomy over investment.

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