Further information
Related forms
A Fringe Benefits Tax Assessment Form needs to accompany all food and drink payments (including on credit card) that are coded to account 612.
Light meals coded to account 615 do not require a form; however, information about the purpose of the light meal and number of attendees should be written on the associated invoice or credit card statement that is sent up to Financial Services for payment/acquittal.
Note: Completing an FBT Assessment Form does not necessarily mean FBT will be charged. The form simply provides enough information in order for FS-Tax to make an accurate assessment for FBT purposes.
An alternative to using the single benefit form, the Meal Entertainment Form – Multiple Benefits, can be used where a single invoice authorisation/credit card acquittal journal/N-Form includes multiple meals.
Where a Meal Entertainment Form is completed, the school is also required to complete a Meal Entertainment Attendee List. This list must be retained by the school for five years (according to the relevant tax law), and it does not need to be submitted to FS-Tax.
This form is to be completed when an employee is in receipt of an in-house benefit. In-house benefits include:
- University Club membership
- PIAF tickets
- therapy provided by the Robin Winkler Clinic
- services provided by the UWA Podiatry Clinic.
The provision of entertainment means the provision of entertainment by way of food, drink or recreation, or accommodation or travel in connection with, or to facilitate the provision of, such entertainment.
Purpose of the policy and summary of issues it addresses
This decision tree assists in the proper classification of entertainment expenditure.
Tax-exempt body entertainment fringe benefit
Tax-exempt body entertainment fringe benefit is non-deductible entertainment provided to employees by a tax-exempt body such as the University. This type of entertainment is treated in a different manner for FBT purposes than entertainment provided by a taxable employer.
Is entertainment tax-deductible?
Expenses incurred in respect of the provision of entertainment are generally not allowed as an income tax deduction.
Where entertainmen
Policy statement
| Circumstances in which food or drink provided, either on or off UWA premises |
Fringe benefits tax arises? | ||
|---|---|---|---|
| For employees Yes/No |
For associates Yes/No |
For clients Yes/No |
|
| At a social function, for example a staff Christmas party | Yes | Yes | No |
| In an in-house dining facility – not at a social function | No | Yes | No |
| In an in-house dining facility at a social function | Yes | Yes | No |
| Morning and afternoon teas, and light lunches | No | Yes | No |
| At a social function or substantial business lunch | Yes | Yes | No |
| Employee on business travel overnight: | |||
| • Travelling Employee | No | Yes | No |
| • Non-Travelling Employee | Yes | ||
| Meal consumed incidental to attendance at an: | |||
| • eligible seminar | No | N/A | N/A |
| • exempt training seminar | No | ||
| • CPD seminar | No | ||
| • other | Yes | ||
| At a social function that meets the definition of a minor benefit | No | Yes | No |
Deductible entertainment
Deductible entertainment includes:
- food and drink consumed on business travel away from home
- food and drink provided at an eligible seminar
- food and drink provided at an exempt training seminar
- food and drink provided on working days in an in-house dining facility
- food and drink provided on working days in an eligible dining facility to employees whose employment duties are performed in that facility
- overtime meals provided to an employee pursuant to an industrial award.
Business travel away from home
Generally, food and drink provided to an employee travelling in the course of their employment is tax-deductible entertainment and does not constitute 'meal entertainment'. As a result, the benefit(s) provided will be classified as either expense, property or residual fringe benefits with possible reductions/exemptions.
Where there is entertainment other than food or drink provided (such as a floor show) then the expenditure is in respect of entertainment and will amount to meal entertainment. The University then has the option to elect to use either the 50/50 or log book method to calculate the fringe benefits tax liability of the 'meal entertainment'. Alternatively, no election need be made and the benefits provided will be classified as expense,property or residual fringe benefits with possible exemptions/reductions.
Compensation to an employee for travelling expenses must be reasonable. Certain substantiation requirements exist for employees travelling in the course of their employment, regardless of whether the expenditure constitutes deductible or non-deductible entertainment, and are set out in the following decision tree.
* Separate rules apply for travelling allowances paid to employees.
Should there be any entertainment expenditure incurred whilst travelling in the course of employment the entertainment may be subject to FBT.
Eligible seminar
To qualify as an eligible seminar all of the following conditions must be satisfied:
- there must be a conference, convention, lecture, training session, or educational course
- it must have continuous duration of four hours or more; meals, rest or recreation breaks are not treated as affecting the continuity of a seminar and are not taken into account in determining the duration
- the sole or dominant purpose of the seminar must not be the promotion or advertising of the University or its goods or services
- the sole or dominant purpose of the seminar must not be the provision of entertainment.
Generally a meeting will not be an eligible seminar if its sole or dominant purpose is to enable discussion of the affairs of the University between persons associated with the University (unless the meeting qualifies as an exempt training seminar).
Exempt training seminar
An exempt training seminar must be:
- organised by or on behalf of the University solely for training employees in matters relevant to the business of the University, and/or enabling employees to discuss general policy issues relevant to the internal management of the University's business
- conducted in conference facilities operated by a business operation unrelated to the University.
In-house and eligible dining facilities
In-house dining facility
An in-house dining facility means:
- a canteen, dining room or similar facility that is located on the University's premises
- the facility is operated wholly or principally for providing food and drink on working days to employees
- the facility is not open to the public at any time.
An in-house dining facility does not include a boardroom or meeting room with kitchen facilities.
Some relief from fringe benefits tax is also available for employees working in the restaurants.
Where employees are provided with meals in a in-house dining facility not at a social function, these meals will not be subject to FBT. Where associates are provided meals in the in-house dining facility the meals will be subject to FBT.
Eligible dining facility
An eligible dining facility means:
- a canteen, dining room, or similar facility
- a cafe, restaurant or similar facility
- the food and drink is provided to employees whose duties of employment are performed in that facility.
Employees who work at the campus restaurants
Food and drink provided at the restaurants to these employees will be classified as an exempt property fringe benefit.
Overtime meals
The provision of overtime food or drink to an employee pursuant to an industrial award will either be an expense payment, property fringe benefit or residual fringe benefit.
In addition, if an employee receives an overtime meal allowance under an industrial award,the employee is assessed on the allowance and the University is not liable to fringe benefits tax on this amount.
The employee may be able to claim a tax deduction for costs actually incurred on the overtime meals.
Morning teas, afternoon teas and light meals
Breakfasts, light lunches and morning and afternoon teas provided to University employees (and associates of employees) on a working day on University premises is not the provision of entertainment. Similar refreshments provided to 'visitors' to the University's premises do not constitute the provision of entertainment.
Expenditure on morning and afternoon tea and light meals is not entertainment. It will need to be considered under expense payment, property or residual fringe benefits together with any applicable reductions or exemptions.
| Morning and afternoon tea | Light meals |
|---|---|
|
Morning and afternoon tea include light refreshments such as:
|
Light meals include:
|
Alcohol
As light meals become more elaborate, they take on more of the characteristics of entertainment. If alcohol is provided at morning or afternoon tea or at a light meal, this constitutes entertainment.
Food and drink (including alcohol) consumed by an employee whilst travelling in the course of his/her employment does not constitute entertainment unless it is consumed at the same time as a floor show or other form of entertainment.
Minor entertainment benefits
Certain tax-exempt body entertainment minor fringe benefits are exempted from FBT if they are less than $100 GST inclusive (per person) and it would be unreasonable to treat them as a fringe benefit. Minor entertainment benefits provided by the University will only be exempt where:
- entertainment is provided to the employee or associate on University premises solely as a means of recognising the special achievements of the employee in a matter related to his/her employment (such as an award ceremony)
- the provision of entertainment to the employee or associate is merely incidental to the provision of entertainment to outsiders and the meal provided to the employee or associate consists of light refreshment.
It is important to note that the minor fringe benefits exemption for taxable employers (entities subject to income tax) are not the same as the above rules which apply to tax-exempt entities.
Christmas party
Where the University provides employees with a Christmas party it will be a tax-exempt body entertainment fringe benefit. Therefore, even where the Christmas party is held on University premises it will not be exempt from FBT as it is not a property fringe benefit.
The minor exempt benefit mentioned above will not apply even where the notional taxable value is less then $100 GST inclusive per employee because the entertainment is not incidental to provision of entertainment to outsiders or as recognising the special achievements of an employee.
University information
CRICOS Code: 00126G
