This benefit is a very specialised piece of legislation that only applies to pastors, making it quite unique. Exempt Fringe Benefits (EFB) are a mechanism by which a church can give a benefit to a pastor without needing to pay tax.
Pastors working at Queensland Baptist churches are deemed to be a “Religious Practitioner” as defined in subsection 136(1) of the Fringe Benefit Taxation Act Australia. Queensland Baptists recommends that eligible pastors are paid as:
50% cash (taxable) component and 50% exempt fringe benefits.
Exempt Fringe Benefits may be used for any incurred personal expenses of the pastor, but not taken in cash. Historically lists of “eligible” uses have been published, but there is no legal restriction on the use of exempt benefits.
However, in stressing that the benefit cannot be taken in cash, this includes payments to accounts where the pastor can draw down that benefit as cash – such as a line of credit on a home, or cash advances on a credit card. This is difficult to enforce in a fail-safe manner, but an understanding of the legal requirement and a commitment to comply ought to be sought.
For a detailed discussion of Exempt Fringe Benefits for Queensland Baptists registered pastors, please see the Remuneration Guidelines.
Should you have any questions about Exempt Benefits for Pastors, please contact Administrative Services at firstname.lastname@example.org or phone 07 3354 5600