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PCR and RAT tests to be tax deductible, FBT free

Feb 12, 2022 | Business, Real News, Taxation

The Treasurer has announced that PCR and rapid antigen tests (RAT) will be tax deductible for individuals and exempt from fringe benefits tax (FBT) for employers if purchased for work purposes. The recent announcement is welcomed by local business and communities around the nation. Read on for PCR and RAT tests to be tax deductible, FBT free!

There has been confusion over the tax treatment of RAT tests with the Prime Minister stating for some time that they are tax deductible, but in reality, the tests were probably only deductible in limited circumstances.

If you have had to purchase RAT tests to be able to work, you will be able to receive a tax deduction for the cost you have incurred from 1 July 2021 (you will need evidence of the expense). If the RAT test cost $20, someone on a marginal tax rate of 32.5% would receive a tax benefit of $6.50.

For business, it is expected that RAT, PCR and other coronavirus tests will be exempt from FBT from the 2021-22 FBT year.

The measure will take effect from the beginning of the 2021-22 tax year and will be in place permanently. It will apply both when an individual is required to attend the workplace or has the option to work remotely. The Government also announced that legislation will be introduced to make it clear that work-related COVID-19 test expenses incurred by individuals will be tax deductible and FBT in the appropriate circumstances.

Should you require additional information or assistance in regards to the tax consequences of PCR and rapid antigen tests, please reach out to our Team.