COVID-19 vaccination incentives and rewards – ATO fact sheet

December 16, 2021

The ATO has released a fact sheet for employers on the tax and superannuation consequences of providing incentives or rewards to employees who get vaccinated against COVID-19.

Specifically, the ATO reminds employers that they have PAYG withholding and super obligations in relation to cash payments and paid leave to employees for getting vaccinated. Employers should contact the ATO without delay if they have failed to withhold tax, and the ATO will consider remitting penalties.

Non-cash benefits to employees such as vouchers and competition prizes may attract FBT (unless an exemption or reduction applies). The provision or payment of transport to and from the vaccination centre is exempt from FBT. There are no FBT consequences if benefits are provided to the general public (eg discounts for the vaccinated).

The ATO has published a range of information on COVID-19 and fringe benefits tax for businesses whose fringe benefits tax obligations may have changed for benefits provided to employees due to COVID-19.