May 14 2015
Federal Budget effects on Salary Packaging Meal Entertainment and Holiday Accommodation Benefits
On the 12th of May 2015, the Federal Government announced their 2015/16 Federal Budget which included changes to the Meal Entertainment and Holiday Accommodation/Venue Hire benefits.
Employees of both Public Health and NFP sector employers will be affected, e.g, anyone who currently packages Meal Entertainment or Holiday Accommodation/Venue Hire benefits, or who is entitled to package these benefits.
Changes are effective from 1 April 2016, where these Salary Packaging benefits will 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).
Until the 31st of March 2016, you can continue to salary package both Meal Entertainment and Holiday Accommodation and Venue Hire as normal.
However, we strongly advise that any Meal Entertainment amounts that you have either packaged for the current salary packaging year or rolled over amounts from previous years are FULLY claimed and reimbursed BEFORE 31 March 2016.
Any unspent amounts rolled over for the 2016/17 year will be a part of the cap applicable from 1 April 2016.
Although Meal Entertainment and Holiday Accommodation and Venue Hire benefits will still be considered separate benefits, from 1 April 2016 a combined cap of $2,550 will apply. That is, expenditure on both benefits will be combined and count towards the new $2,550 cap.
Remunerator will keep you updated on how the changes will come into effect and how we will assist you to manage them.