Under-utilised FBT framework could bolster rural doctor numbers, RSM says

“Essentially, where a staff member lives and works in a remote area and the employer pays their rent as part of the employee’s remuneration package, the rent is generally deductible to the employer and may be exempt from FBT where the eligibility criteria are met.”

While the RAHB has existed under the Fringe Benefits Tax Assessment Act (FBT Act) for almost 40 years, Leslie said its application in the medical sector was relatively new. However, it was rapidly gaining popularity amongst eligible practice owners.

“It’s just such a huge incentive for attracting remote and regional staff and every week we are hearing from more and more practice owners, asking us to help get them set up and implement this ASAP,” he said.

Leslie said the RAHB was an attractive perk, as it could leave employees thousands of dollars better off per year in tax savings.

“From the employee’s perspective, they’re paying their rent from pre-tax income, boosting their take-home pay. So instead of forking out let’s say $500 per week from their after-tax earnings for rent, their overall gross annual salary figure is reduced by $26,000 to reflect the housing costs,” he said.

“More often than not that means they’re pushed down into a lower tax bracket, so they pay less tax on their earnings throughout the year.”

By offering employees competitive perks through the RAHB, Leslie anticipated that rural medical practices would have a better shot at attracting international talent.

“There’s an influx of internationally-trained doctors moving to Australia and for those going to remote and regional areas, it’s a huge benefit to be able to say ‘come on in, we have a fully furnished house ready to go, we’ll pay your rent while you’re here, and the tax savings mean you’ll keep more money in your pocket’,” he said.

“Finding housing in regional areas is extremely difficult, let alone trying to do so from a different country, so the ability to offer up a home that can be moved into straight away just helps to make the recruitment pathway that little bit easier.”