COVID-19 vaccination incentives and rewards

The ATO has reminded employers to consider their tax and super obligations when employees are provided with incentives or rewards for getting their COVID-19 vaccination.

When employees are provided a cash payment, including paid leave for employees to get their COVID-19 vaccination (or additional paid leave to recover from any vaccination side effects), employers should withhold PAYG withholding and make super contributions on the amount.

Furthermore, the payment must be reported to the ATO via Single Touch Payroll (‘STP’) as part of the employee’s salary or wage.

On the other hand, employers must consider the FBT consequences of providing non-cash benefits as an incentive for their employees to get vaccinated.

Such benefits may include:

• Goods or services provided to the employee.
• Vouchers and gift cards.
• Prizes won by an employee in a competition (e.g., a raffle).

Note that certain FBT exemptions and reductions may apply in some circumstances.

For example, if an employer provides or pays for an employee’s transport to get their COVID-19 vaccination, there is generally no FBT payable.