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Important FBT considerations this festive season

With the festive season approaching, it is timely to consider the Fringe Benefits Tax (FBT) consequences on entertainment so that there are no financial hangovers when coming to complete your FBT return in April next year.

FBT is a tax applied to employers for providing non-cash benefits to an employee (or their associate, such as a partner). Currently the tax rate for FBT is 47% of the cost of the entertainment, however there are exceptions, so Christmas isn’t ruined just yet.

There are two main methods to calculate meal entertainment benefits:

  1. The 50/50 method
  2. The actual method

The stark difference between the two methods is the level of record keeping required, should you elect to calculate meal entertainment using the actual method. Choosing the actual method may help reduce your FBT liability, however you are required to keep a register of the attendees at not only the party, but for each event held during the FBT year.  

For a breakdown of how each method works, along with other important information, read the full article via this link.

Taken from Nexia Australia on 13 November 2023.

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