New limits on FBT entertainment benefits

In the 2015-16 Budget, the Australian Government introduced a separate single grossed up cap of $5,000 for salary sacrificed meal entertainment and entertainment facility leasing expenses (meal entertainment benefits) for employees.

That cap will apply from April 1, 2016, to coincide with the start of the FBT year. The new limits are designed to improve fairness in the Australian tax system and will apply to the use of FBT salary packaged meal and entertainment facility leasing expenses.

Meal entertainment benefits that exceed the $5,000 grossed-up cap will count towards an employee’s existing FBT exemption or rebate cap.

All salary packaged meal and other entertainment benefits will be reported on an employee’s payment summary if their reporting threshold is exceeded.

Employers should consider how the changes may affect any of their clients or employees who may receive or provide salary packaged meal or other entertainment benefits.