Christmas party FBT checklist for business
1 Cash bonuses | Please circle | |
Has the business paid employees with cash bonuses as a year-end reward? If yes, has the employer considered the following:
Note that a deduction should be available for bonuses paid under the general deduction provision as a business cost. | Yes
Yes Yes Yes Yes | No
No No No No |
2 Christmas parties and related entertainment and transport (employees and associates) | ||
Has the business provided food, drink, entertainment and associated travel (ie. ‘meal entertainment’ benefits) during the period to employees and or associates? If yes, have the following been considered? | Yes | No |
Basis for valuing ‘meal entertainment‘ | Please circle method chosen | |
What basis has the business adopted (or intends to adopt) in valuing ‘meal entertainment’ fringe benefits for the FBT year?
| Actual basis (ie. property, expense payment or residual) The business must value each ‘meal entertainment’ based on the fringe benefit type (eg. property, expense payment or residual). Exemptions such as minor benefits exemption, taxi travel exemption and on-site consumption may be applied. Continue below for outcomes. | 50/50 split or 12 week register The business must value all ‘meal entertainment’ provided during the FBT year using one of these methods. No scope available for applying FBT exemptions to such benefits (eg. minor benefits exemption). That is, individual benefits cannot be selected for exemption. Skip to item 3 below. |
Tax implications of ‘meal entertainment benefits’ | |||
If an actual basis of valuing ‘meal entertainment’ is chosen, the following tax implications should be considered: | |||
Scenario | FBT/payroll tax liability? | Income tax deduction? | GST credit available? |
Food and drink provided on business premises Has the employer provided ‘meal entertainment’ to employees (and/or associates):
If yes: Employee: Associate: Associate (minor benefit): |
No (1) Yes No (2) |
No Yes No |
No Yes No |
Food and drink provided offsite Has the employer provided ‘meal entertainment’ to employees (and/or associates) offsite (eg. at a restaurant)? If yes: If property, expenses payment or residual fringe benefit provided: If minor benefit provided: | Yes No (2) | Yes No | Yes No |
Transport to and from function Has the employer provided transport to or from the function to employees (and/or their associates)? If yes, have the following been considered? If taxi travel: Employee: From work premises to function (vice versa) From function to non-work location (vice versa) Minor benefit (if no exempt taxi travel) Associate: Any taxi travel (irrespective of origin or destination) Minor benefit If transport other than taxi (eg. hired bus) Employee: Any travel (irrespective of origin or destination) Minor benefit Associate: Any travel (irrespective of origin or destination) Minor benefit | No (3) Yes No (2) Yes No (2) Yes No (2) Yes No (2) | No Yes No Yes No Yes No Yes No | No Yes No Yes No Yes No Yes No |
3 Christmas gifts | Please circle | |
Has the employer provided gifts to employees or associates? If yes, the tax implications for certain gifts are as follows: | Yes | No |
FBT/payroll tax liability? | Income tax deduction? | GST credit available? | |
Non-entertainment examples Gift vouchers – department store (eg. Myer/Target) Hampers (containing consumables) Consumables – such as chocolates Electronic equipment (eg. iPod) Toys and kids’ gifts If above gifts, or similar, a minor benefit Entertainment examples Champagne Dinner voucher Theatre tickets or similar If above gifts, or similar, a minor benefit | Yes (4) Yes (4) Yes (4) Yes (4) Yes (4) No (2) Yes (4) Yes (5) Yes (4) No (2) | Yes Yes Yes Yes Yes Yes Yes (6) Yes (6) Yes (6) No | Yes Yes Yes Yes Yes Yes Yes Yes Yes No |
(1) An exemption for food and drink provided to employees (not associates) on a working day (only if actual basis is used).
(2) Must be less than $300 (also only if actual basis for valuing benefit used).
(3) Exemption for employee (not associate) if travel is single trip from or to workplace.
(4) Are property fringe benefits, and must value using actual basis.
(5) A meal entertainment benefit. Businesses may elect to apply 50/50 split or 12 week register to value.
(6) Some “entertainment” can be covered under income tax provisions, however deduction can be denied unless provided as fringe benefit