Salary sacrificing a laptop or phone is one of the simplest tax wins available to Australian employees — when it is done right, a $2,000 laptop can cost you hundreds of dollars less than buying it yourself. The reason is a fringe benefits tax (FBT) exemption for work-related items. But the exemption has conditions: the item must be mainly for work, there is a one-item limit for identical devices, and a major change from 1 April 2027 will remove the exemption for salary-sacrificed items entirely. Here is how the rules work now, and why timing matters.
If you want to compare the after-tax cost of sacrificing versus buying outright, the salary sacrifice calculator will run the numbers for your salary and tax bracket.
How salary sacrificing a device works
In a salary sacrifice arrangement, you agree with your employer to give up part of your future cash salary in exchange for a benefit — in this case, a laptop, tablet or phone. Because the sacrificed amount never becomes taxable salary, you save income tax (plus the Medicare levy) on that amount. Your employer buys or leases the device and provides it to you, usually deducting the cost from your pre-tax pay over an agreed period.
Normally, providing a non-cash benefit to an employee attracts FBT, which the employer pays at 47% — a cost employers usually pass back to you, wiping out the benefit. Work-related items escape this problem because they are specifically exempt from FBT under section 58X of the Fringe Benefits Tax Assessment Act 1986.
Which items are exempt
The exemption covers items provided mainly for use in your employment. The ATO’s list includes:
- Portable electronic devices: mobile phones, laptops, tablets, portable printers, calculators and portable GPS units
- Computer software used for work
- Protective clothing required for the job
- Briefcases
- Tools of trade
The key test is “mainly for work” — the device must be used primarily (more than 50%) for work purposes. A laptop bought for the business but used mostly for personal streaming does not qualify. The ATO does not demand a usage diary in every case, but your employer may ask you to declare the work use, and the declaration should be honest.
The one-item-per-year limit
Currently, the exemption is limited to one item per employee per FBT year for items with the same or a substantially identical function, unless the extra item is a genuine replacement. The FBT year runs from 1 April to 31 March — not the financial year — so the count resets each April.
What counts as “substantially identical” matters in practice. A laptop and a phone have different functions, so one of each in the same FBT year is fine. A laptop and a tablet, on the other hand, are likely to be treated as substantially identical — so a second one in the same year would not be exempt unless it replaces a broken device.
There is one important exception: small businesses — those with aggregated turnover under $50 million — can provide more than one work-related portable electronic device per employee per FBT year, even with substantially identical functions. If you work for a small business, the one-item limit does not apply to you.
How much you actually save
The saving equals the tax you would have paid on the sacrificed salary. Take a $2,000 laptop sacrificed by an employee on a 30% marginal rate plus the 2% Medicare levy:
| Buy it yourself | Salary sacrifice | |
|---|---|---|
| Cost of laptop | $2,000 from after-tax pay | $2,000 from pre-tax pay |
| Pre-tax earnings needed | $2,941 (to leave $2,000 after 32% tax) | $2,000 |
| Tax saved | — | $941 |
In other words, the laptop effectively costs about $1,059 of take-home pay instead of $2,000 — a saving of roughly $941. The higher your marginal rate, the bigger the saving: at the 45% top rate plus the 2% Medicare levy, the same $2,000 device saves around $1,774 (you would need $3,774 of pre-tax earnings to leave $2,000 after 47% tax). Some employers also pass on the GST input tax credit they claim on the purchase, which reduces the pre-tax amount you sacrifice further. Ask your employer whether their arrangement includes the GST saving.
Note that sacrificed amounts reduce your taxable salary, which can affect other calculations: your super guarantee is generally calculated on your full salary including sacrificed amounts under most modern arrangements, but it is worth confirming with payroll, and HECS-HELP repayments are calculated on repayment income, which includes reportable fringe benefits and salary sacrificed super — though an exempt laptop itself is not a reportable fringe benefit.
What does not qualify
- A second identical device in the same FBT year (unless you work for a small business or it is a replacement) — FBT applies and the saving evaporates.
- A device used mainly privately — the exemption fails on the work-use test.
- Phone plans and internet bills: reimbursing your monthly phone or home internet bill is an expense payment fringe benefit, not a work-related item exemption. It may still be tax-effective under the “otherwise deductible” rule, but that is a different mechanism with its own limits.
- Items your employer will not offer: salary sacrifice is voluntary for employers. Not every employer offers device packaging, and some restrict it to certain roles.
The big change: 1 April 2027
This is the deadline that matters most. Under changes enacted in 2026, from 1 April 2027 work-related items provided through a salary sacrifice arrangement will no longer be exempt from FBT. That includes portable electronic devices, computer software, protective clothing, briefcases and tools of trade. If you sacrifice a laptop after that date, FBT will apply and the tax advantage largely disappears.
Two points soften the change. First, items provided directly by the employer — not through salary sacrifice — remain exempt. Second, from 1 April 2027 the one-item limit is removed for items that are not salary sacrificed, for all employers, not just small businesses. The practical message for employees is simple: if you have been planning to salary sacrifice a laptop or phone, arranging it in the FBT year ending 31 March 2027 preserves the exemption. Waiting until after 1 April 2027 means the same arrangement costs you FBT.
Steps to set it up
- Check your employer offers salary packaging for work-related items, and ask whether the GST saving is passed on.
- Choose a device you will mainly use for work, and confirm it does not breach the one-item limit for this FBT year.
- Sign a salary sacrifice agreement before the purchase — the arrangement must be prospective, covering future pay, not a reimbursement of something you already bought.
- Keep the agreement and any work-use declaration for your records.
- If you are planning around the 2027 change, aim to have the arrangement completed within the FBT year ending 31 March 2027.
Frequently asked questions
Can I salary sacrifice a laptop and a phone in the same year?
Yes. A laptop and a phone have different functions, so they are not substantially identical items and the one-item limit does not block the combination. A laptop and a tablet in the same year would be a problem unless you work for a small business or one is a replacement.
Does the exemption apply if I use the device partly for personal use?
Yes, provided the device is mainly — more than 50% — for work. Incidental personal use does not disqualify it. If personal use dominates, the exemption fails.
What happens after 1 April 2027?
Work-related items provided through a salary sacrifice arrangement will no longer be FBT-exempt. Employers can still provide them directly (not via sacrifice) and claim the exemption, and the one-item limit will be removed for non-sacrificed items.
Is a salary sacrificed laptop a reportable fringe benefit?
No, while it is exempt from FBT it is not reportable, so it does not inflate your repayment income for HECS-HELP or affect family assistance thresholds. If it became taxable after the 2027 change, the reportable treatment would need to be rechecked.
Can I claim a tax deduction for the same laptop?
No. You cannot claim a deduction for an item your employer provided through salary sacrifice — that would be double-dipping. The tax saving comes from the pre-tax payment, not from a deduction.
What if my employer does not offer salary packaging?
You cannot force an employer to offer it. Your alternative is buying the device yourself and claiming a work-related deduction for the work-use portion, subject to the usual substantiation rules.
Conclusion
Salary sacrificing a work laptop or phone remains one of the cleanest tax savings available to employees: a genuine work device, within the one-item limit, costs you roughly your marginal tax rate less than buying it outright. The window for the salary-sacrifice version of this exemption closes on 31 March 2027, so if a device upgrade is on your horizon, the FBT year ending then is the time to do it. Run your own numbers through the salary sacrifice calculator first, confirm the arrangement with your employer, and keep the agreement on file.