The Full Federal Court (the Court) has handed down its decision in Jamsek v ZG Operations Australia Pty Ltd(No 3) [2023] FCAFC 48. The case was remitted from theHigh Court in ZG Operations Australia Pty Ltd v Jamsek[2022] HCA 2 (Jamsek HCA) for the Court to consider whether the workers were employees or independent contractors for the purposes of accounting services sydney subsection 12(3) of theSuperannuation Guarantee (Administration) Act 1992(SGAA).

The case concerned drivers who drove delivery trucks for a group of companies (ZG) for a period of almost 40 years. Although the workers were originally employed by ZG, contractual arrangements were later entered into that purported to make the workers independent contractors. In the mid-1980s, the workers in question set up a partnership agreement with their respective spouses, entered into a written contract with ZG andpurchased trucks from ZG to give effect to the new arrangement.

At first instance, the primary judge held that the workers were not employees of ZG under the ordinary meaning of the term or the expanded definition in subsection 12(3) of the SGAA. The primary judge’s decision was overturned on appeal on both counts and was subsequently appealed to the High Court.

In Jamsek HCA, the High Court broadly held that where there is a comprehensive agreement between the workers and putative employees, the employee-contractor distinction should be made with reference to the rights and obligations set out in the agreement.

The High Court’s decision was limited to an analysis of the ordinary meaning of the term ‘employee’.The Court upheld the primary judge’s findings that the workers were not employees under the expanded definition in subsection 12(3) of the SGAA, which states that a person will be an employee if the ‘person works under a contract that is wholly or principally for the labor of the person’. The Court held that subsection 12(3) of the SGAA applies only where the putative ‘employee’ is a natural person who is a party to the contract in their individual capacity and does not apply to partnerships. Further, section 72 of the SAGA does not operate to deem a partnership to be ‘a legal person’ for the purposes of being treated as a putative employee’ under subsection 12(3) of the SGAA.

Subsection 12(3) of the SGAA also requires the contract to be wholly or principally ‘for the labor of the person, from the perspective of the putative employer’. On the balance of the evidence before theCourt, their Honors concluded that the workers had not discharged their onus of demonstrating that this factor had been met. When making this decision, theCourt considered a number of factors including the payment and fee structure, ability to delegate, the entity that carried the risk and required capital to complete the duties under the contract.

duties under the contract

Electric vehicle home charging:-

The ATO has released for consultation draft PracticalCompliance Guideline PCG 2023/D1: Electric vehicle home charging rate – calculating electricity costs when charging a vehicle at an employee’s or individual’s home (PCG 2023/D1). The draft PCG sets out the ATO’s methodology used to calculate the cost of electricity when an electric vehicle is charged at an employee’s or individual’s home.

The EV home charging rate is 4.20 cents per kilometer for FBT or income years commencing on or after 1 April2022.To use the methodology, the vehicle must be a fully electric, zero emissions vehicle and cannot be a plug-in hybrid vehicle with an internal combustion engine.

If a commercial charging station cost is used, theEV home charging methodology set out in the draftPCG cannot be used. If the EV home charging rate is used, the commercial charging station cost must be disregarded.The taxpayer must keep a record of the distance traveled by the vehicle that complies with recordkeeping requirements detailed in the draft PCG. If Odometer records are not available from the start of the 2022–23 FBT or income year, a reasonable estimate may be used based on service records, logbook or other information. This transitional approach is available only for the opening odometer reading on 1 April 2022 or 1 July 2022.

Electric vehicle home charging

FBT car allowances:-

The ATO has released TD 2023/1 Fringe benefits tax: what are the rates to be applied on a cents per kilometer basis for calculating the taxable value of a fringe benefit arising from the private use of a motor vehicle other than a car for the fringe benefits tax year commencing on 1 April 2023.

This determination sets out the rates to be applied when calculating the taxable value of a fringe benefit arising from the private use of a motor vehicle for theFBT year commencing on 1 April 2023. For vehicles with engine capacity of 0-2500cc, the rate is 62 cents per kilometer. For vehicles with an engine capacity more than 2500cc, the rate is 73 cents per kilometre.For motorcycles, the rate is 18 cents per kilometer.

FBT car allowances

FBT food and drink allowances:-

The ATO has released TD 2023/2 Fringe benefits tax:reasonable amounts under section 31G of the Fringe Benefits Tax Assessment Act 1986 for food and drink expenses incurred by employees receiving a living-away-from-home allowance fringe benefit for the fringe benefits tax year commencing on 1 April 2023.This determination sets out reasonable food and drink expenses incurred by employees receiving a living-away-from-home allowance for the FBTyear commencing 1 April 2023. If the total food and drink expenses for an employee do not exceed the reasonable amount, the expenses do not need to be substantiated. The determination covers allowances in and out of Australia. The allowance amount withinAustralia for one adult is $316 per week.


Residential property investment loansOn 6 April 2023, a Gazette notice was published advising of an ATO data-matching project relating to residential investment property loans (RIPL).

Under the project, the ATO will acquire RIPL data from authorized financial institutions for 2021–22 throughto 2025–26.

The data items will include:-

Client identification details (including names,addresses, phone numbers and dates of birth);account details (including account numbers,BSBs, balances, commencement and end dates);transaction details (including transaction date and transaction amount); and property details (including property address).The ATO estimates that records relating to approximately 1.7 million individuals will be obtained each financial year.

The data will be acquired and matched against ATOrecords to assist the ATO in executing strategies to: identify relevant cases for administrative action, including compliance activities and educational strategies; inform rental property owners of their taxation obligations as part of an educative campaign;and avoid unnecessary contact with those who are correctly reporting and claiming rental property income or expenses.

FBT food and drink
Residential property investment


Additional tax on high balancesThe additional tax on high super balances is proposed to commence on 1 July 2025 and apply from the 2025–26 financial year onwards. It is estimated less than 80,000 people will be impacted by the additional tax;that is, individuals with superannuation balances more than $3 million on 30 June 2026.

The additional tax is likely to operate in a similar manner to the extra tax on contributions pursuant to Division293 (Division 293) of the Income Tax AssessmentAct 1997 (ITAA 1997), which imposes a 15% tax on contributions made by or for individuals whose income exceeds the Division 293 threshold of $250,000. The Core features of Division 293 may be adopted in the design of future exposure draft legislation on the proposed additional tax, which will similarly be levied directly on the individual. No changes will be made to the taxing arrangements within superannuation funds.The additional tax is proposed to be calculated using the following formula:

Additional tax liability = 15% × Earnings × Proportion ofearnings.In this formula, ‘earnings’ broadly represents the movement in the individual’s total superannuation interest in a financial year. This is determined by reference to the difference between their opening and closing total superannuation balance (TSB) for the year.

Adjustments to the earnings amount are proposed to be made for withdrawals and contributions:Earnings = (TSB current financial year + Withdrawals –Net contributions) – TSB previous financial year.

The TSB for the additional tax will likely utilize the existing definition in subsection 307-230(1) of the ITAA1997. This would mean that the TSB will be the sum of the total value of the accumulation phase interests,retirement phase interests, in-transit rollovers and certain outstanding limited recourse borrowing arrangements less personal injury or structured settlement contributions.

The consultation paper proposes that the TSB for the previous financial year will be deemed to be $3million in instances where the individual is subject to the additional tax advice expert sydney for the first time, ensuring that the individual is taxed only on the earnings on the proportion of the superannuation balance above $3Million.

Additional tax

The calculation of the ‘proportion of the earnings’, the final component of the formula for the additional tax,ensures that the additional tax is levied only on the earnings on the amount above $3 million. It is proposed to be calculated as follows:Proportion of earnings = (TSB current financial year –$3 million) ÷ TSB current financial year.The consultation paper proposes to allow individuals who are liable for the additional tax to meet their liability in a similar manner to Division 293. 

This would mean that individuals could pay their tax liability by either: using funds held outside their superannuation account; or releasing amounts held in their superannuation account.