hello,
Wanting advice for a NFP organisation.
Company is offering its employees an annual outing organised in-house. Value paid includes meals, accommodation, team building acitivity and parking. Event occurs offsite, on weekend. Each benefit seperate is minor but added up together is from 300 - 500, given its an annual event and over $300, best to assume that FBT applies?
50/50 apply?
Thanks
Hi @CLB
Good idea for checking! It's gonna be a tricky one to work out.
Minor benefits are exempt benefits.
That means there's no FBT. Minor benefits must be less than $300 in value and unreasonable to treat as a fringe benefit.
The minor benefits exemption does not apply to entertainment benefits by income tax-exempt entities (such as NFPs).
This means any entertainment benefit would be taxable.
Also, it won't apply to meal entertainment or entertainment facility leasing where you use the 50:50 method.
This means the entertainment (team building) and meals won't be exempt benefits.
But this means for those benefits, you can use the 50:50 method.
Remember that entertainment facilities just means the venue, not the activity performed in the venue. You might not be actually providing an entertainment facility benefit.
For the other benefits (accommodation and parking), we need to look at if they are minor benefits to workout if FBT applies.
Where you provide an employee with separate benefits that are in connection with each other (for example, a meal, a night's accommodation and taxi travel) you need to look at each individual benefit provided to the employee to see if the notional taxable value of each benefit is less than $300.
That means each part of the benefit (meals, accommodation, activity, parking) need to be looked at separately.
To be a minor benefit, it also needs to be unreasonable to treat it as a fringe benefit.
Broadly, you must consider five key parts to determine if it would be unreasonable to treat it as a fringe benefit:
Since tax is self-assessed, you'll have to determine for yourself ultimately.
The information I've given is a summary of the minor benefits section of our Fringe Benefits Guide for employers and calculating the fringe benefit on our website, which will help you decide
Hi @CLB
We will do some research on this one for you.
Hi @CLB
Good idea for checking! It's gonna be a tricky one to work out.
Minor benefits are exempt benefits.
That means there's no FBT. Minor benefits must be less than $300 in value and unreasonable to treat as a fringe benefit.
The minor benefits exemption does not apply to entertainment benefits by income tax-exempt entities (such as NFPs).
This means any entertainment benefit would be taxable.
Also, it won't apply to meal entertainment or entertainment facility leasing where you use the 50:50 method.
This means the entertainment (team building) and meals won't be exempt benefits.
But this means for those benefits, you can use the 50:50 method.
Remember that entertainment facilities just means the venue, not the activity performed in the venue. You might not be actually providing an entertainment facility benefit.
For the other benefits (accommodation and parking), we need to look at if they are minor benefits to workout if FBT applies.
Where you provide an employee with separate benefits that are in connection with each other (for example, a meal, a night's accommodation and taxi travel) you need to look at each individual benefit provided to the employee to see if the notional taxable value of each benefit is less than $300.
That means each part of the benefit (meals, accommodation, activity, parking) need to be looked at separately.
To be a minor benefit, it also needs to be unreasonable to treat it as a fringe benefit.
Broadly, you must consider five key parts to determine if it would be unreasonable to treat it as a fringe benefit:
Since tax is self-assessed, you'll have to determine for yourself ultimately.
The information I've given is a summary of the minor benefits section of our Fringe Benefits Guide for employers and calculating the fringe benefit on our website, which will help you decide
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