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FROM APRIL 1, 2016, WHAT ARE THE CHANGES MADE TO THE FRINGE BENEFITS TAX (FBT) OF SALARY PACKAGED MEAL AND OTHER ENTERTAINMENT BENEFITS FOR EMPLOYEES?

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23
May

Fringe Benefits Tax (FBT) is a tax payable by employers for benefits paid to an employee. There have been some changes of tax rate on the fringe benefits of salary packaged meal and other entertainment benefits tool from the 1st of April 2016. Among those changes some will affect all the employees where as some will affect only not-for-profit organisations.

Changes for all employees

The following applies to all employees:

  • From now on the salary packaged meal and other entertainment benefits (provided by the employers) will be included on the payment summary per the chances;
  • From now on the 50-50 split method cannot be used by the employer for leasing expenses as well as 12-week register method.

The above changes are only applicable for those benefits that are provided under a salary packaging arrangement. Such as, entertainment by way of food or drink, a corporate box, boats or planes for providing entertainment and other premises or facilities for providing entertainment.

Changes for non-profit employees

The following applies to all not-for-profit employees:

  • For the salary packaged meal and entertainment facility leasing expenses on non-profit organisation, a separate single grossed-up cap of $5,000 will be applicable;

For the calculation of FBT exemption or rebate cap you must include the amount of separate grossed-up cap.

Per the new changes an employee can receive such benefits worth between $2,329.59 and $2,549.98 without exceeding the $5,000 cap depending on whether the employer is entitled to GST credits.


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