PCR And Rapid Antigen Tests To Be Tax Deductible & FBT Free

The Treasurer has announced that PCR and Rapid Antigen Tests (RAT) will be tax deductible for individuals. It will also be exempt from Fringe Benefits Tax (FBT) for employers if purchased for work purposes.

There has been confusion over the tax treatment of RATs 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 Rapid Antigen tests to be able to work, you will be able to receive a tax deduction for the cost. This is for costs incurred from 1 July 2021 (you will need evidence of the expense). For example, 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, Rapid Antigen, PCR and other coronavirus tests will be exempt from FBT from the 2021-22 FBT year.

The Government will confirm the change through legislation in parliament, later this week.

For tax and business advice on this matter, contact us today!

This is general advice only and has not been prepared with your situation and needs in mind. For individual and personalised advice, we highly recommend that you seek out proper professional advice from your advisers.