Aug 21 2015
Changes to Meal Entertainment & Holiday Accommodation/Venue Hire Benefits Coming!
The Federal Government has proposed a fringe benefits tax cap effective from 1 April 2016 on Meal Entertainment and Holiday Accommodation/Venue Hire benefits, which are currently available via salary packaging for eligible employees within Public Hospitals, Charities and Medical Research Organisations that qualify for FBT exemptions.
The proposal means that from 1 April 2016, these benefits will potentially be capped at $2,550 per FBT year (i.e. a $5,000 grossed up cap divided by the type 2 gross up rate of 1.9608).
What does ‘grossed-up’ mean?
It means that for every $1 dollar packaged for these benefits, the cost is equivalent to $1.96 in grossed up cap. So, the actual dollar value one can potentially claim is $2,550 (i.e. $2,550 x 1.9608 = $5,000).
How does it affect your employees current salary packaging benefits?
It doesn’t affect their current salary packaging benefits. They don’t need to do anything different at this stage and they can continue to salary package these benefits right up to the 31st of March 2016. They also need to remember that the new cap limit for Meal Entertainment and Venue Hire is an additional benefit to their everyday living expenses such as mortgage repayments, credit card payments and rent and it does not have any affect in the claiming of these benefits whatsoever.
So, your employees should take full advantage of this benefit whilst they still can by visiting the thousands of venues available in Australia and around the World**.
The below provides a comprehensive list of inclusions claimable on this benefit;
- Eat-in Meals / Take away*
- Meals with Drinks
- Overseas meals
- Catering of events
- Online meal vouchers (Scoopon, Cudo etc.)
The above are eligible if the following is included:
- Receipts must contain Business name, ABN and total
- Meals/ Food are purchased from restaurants or eateries that have dining facilities*
- Drinks are only allowable if food has been purchased
- Catering of events if provided by an outsourced professional caterer
- Receipts are in converted into Australian Dollars**
- Online voucher for meals and drink only
The following are excluded from the Meals Entertainment benefit;
- Drinks/ Coffee only receipts
- Grocery receipts
- Packaged liquor
- Self-catering of events
- Movie, theatre and concert tickets
- Entry and admission to amusement parks, shows and races