Fringe benefits tax: is a payment by a sporting club for medical/hospital expenses arising from injuries suffered by a player during training or playing exempt from fringe benefits tax?

Yes. Where a benefit is made by a sporting club for medical/hospital expenses arising from injuries suffered by a player during training or playing, and that benefit is made under a workers' compensation law, it is exempt from fringe benefits tax (FBT) under subparagraph 58J(1)(b)(i) of the Fringe Benefits Tax Assessment Act 1986 .

Where a player's employment is not covered by a workers' compensation law, an exemption also applies under subparagraph 58J(1)(b)(ii) if the benefit is reasonable having regard to the facts of the case.

In some cases, a doctor's fee is more than the amount a player can claim as a rebate from Medicare and/or a private health fund. If the sporting club pays the difference, it is known as a "medical gap payment." Generally, we consider this type of benefit to be reasonable in terms of section 58J and the benefit is exempt from FBT. Note: Taxation Ruling MT2032 provides guidelines as to the circumstances in which players are to be treated as employees for FBT purposes. Example: John, who is employed by sporting club Z as a player, breaks an arm during a training session. He is not covered by any workers' compensation law. The total medical expense bill for the treatment of the injury adds up to $2000. However, John can only claim a total of $1800 by way of rebates from Medicare and his private health fund. Sporting club Z pays the difference of $200. This medical gap payment is exempt from FBT.