Question

An employer pays the cost of a subscription to a professional journal for all employees. Each subscription costs the employer $470 per employee per year. What category of fringe benefit does the subscription fall into?

Select one:

a. Exempt fringe benefit

b. Expense payment fringe benefit

c. Residual fringe benefit

d. Car fringe benefit

Answer 1

The answer is b.

This Subscription fall into Expense Payment Fringe Benefit.

An Expense payment fringe benefit arises where an employer pays or reimburses expenses incurred by an employee.

An expense fringe benefit may arise where the Employer either:

1. pays or reimburses an employee for expenses they incur; or

2. pays a third party in satisfaction of expenses incurred by an employee.

In either case, the expenses may be business expenses or private expenses, or a combination of the two.