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:

Cash Payments:
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.

Non-cash Benefits:
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:
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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