Bulletin No: 137 Volume: 22 Thursday 28 July 2016
To: ALL MFB OPs MEMBERS
CLARIFICATION ON TAX RATES FOR ALLOWANCES IN PROPOSED EBA
At the Members Meeting on Tuesday concerns were raised by a member regarding the way in which Spoilt Meals Allowances and Travelling Allowances are taxed at the highest rate in the MFB due to the payment of these allowances coming from petty cash at the station level.
As there seems to be some confusion around this issue the UFU has put together the below explanation to clarify the matter:
Tax Treatment of MFB Allowances
- MFB currently get taxed at the highest marginal rate due to the payment of allowances through petty cash. This can be amended if MFB members wish to change their payment of allowances to electronic through payroll however it has been expressed to the UFU from many members that they wish to continue with the petty cash method of payment to avoid delays in payment of allowances.
- MFB members are still able to claim the difference between the top marginal tax rate and their tax rate through their tax return.
- The CFA and MFB meal allowances are the same quantum and have been increased 19% in the proposed EBA. This is over and above CPI. This also applied to the km allowance.
- Commissioner Roe has not recommended an increase to the meal allowances in either the CFA or MFB above the 19% increase already applied. Commissioner Roe recommended a current CFA condition to apply regarding the treatment of tax in the CFA proposed Agreement. The UFU have included this provision in both the CFA and MFB proposed agreements which allows the parties to pursue reduction in net amounts to ensure no employee is disadvantaged. The provision from the Final Recommendation is as follows:
“The monetary amounts of the allowances provided for in this agreement set out in Schedule 4 (with the exception of Clause 99.6 Personal Expenses and Accommodation) shall be paid in accordance with Australian Tax Office legislation. However, in the case where an employee receives less than the net amount stipulated in Schedule 4 the parties agree to have discussions regarding the reduced quantum. Each party reserves their rights to pursue any reduction in net entitlements in accordance with the above so no employee is disadvantaged.”
If you have any further questions regarding this matter please contact the Union Office.
Strength in Unity
READ OUT AT MUSTER AND PIN ON NOTICE BOARD
Authorised by Peter Marshall, Branch Secretary