|Monthly tax tip:
Vaccinations have been a hot topic lately and we have been answering a number of questions surrounding deductibility as there is a lot of confusion with this expense. Vaccinations are considered a private expense and therefore cannot be claimed as a tax deduction (even if it’s required by your employer/industry). Vaccination incentives are becoming popular among employers and would be treated for tax purposes as following:
If a cash payment is received for getting a vaccine then it should be treated as a bonus which should be included in the employees’ payslip with the appropriate tax withholding applied.
If an employee receives a benefit for getting a vaccine (e.g. gift certificate, tickets, vouchers) then they would not need to declare that as income on their tax return however it may be treated as a reportable fringe benefit. Fringe benefits tax would not be payable as long as the benefit is offered and available to all employees.
Paid leave can be provided to employees to be able to get a vaccine and possibly also to recover from any side effects. This would be treated as usual paid leave and tax would be withheld from the payment.
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