With the holiday season on the way you may be planning to celebrate with your staff.
Before you hire a restaurant or book an event, make sure you work out if the benefits you provide your employees are considered entertainment related, and therefore subject to fringe benefits tax (FBT).
This will depend on:
- the amount you spend on each employee
- when and where your celebration is held
- who attends – is it just employees or are partners, clients or suppliers also invited?
- the value and type of gifts you provide.
Keep all records for the entertainment-related benefits you provide, including how you calculated the taxable value of the benefits.
It’s important to get on top of how FBT works before you provide perks and extras, otherwise you may end up with an unexpected FBT liability.
Check out the fringe benefits tax and entertainment information on the ATO website.
Source: ATO Newsroom