With the holiday season coming up, you may be planning to celebrate with your paid employees.
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 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.
If you do provide entertainment-related fringe benefits, keep records detailing all of this information so you can calculate their taxable value.
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.
Visit our website for more information on FBT and entertainment for not-for-profit organisations, including common entertainment scenarios.