New changes to salary packaged entertainment

From 1 April 2016, all employers providing salary packaged meal entertainment or entertainment facility leasing expenses (EFLE) benefits to employees will be unable to use the 50/50 split method and 12 week register method for valuing the salary packaged benefits. Only the actual method can be used to determine the FBT on these benefits. This has created an extra burden on employers who usually apply the 50/50 split method for non-salary packaged entertainment benefits provided to employees, increasing the amount of record keeping required. However in our experience, employers that are not FBT exempt or FBT rebatable do not typically provide salary packaging to employees for entertainment expenses, so this recent change is not likely to impact many taxable employers.

Salary packaged meal entertainment or EFLE benefits provided to employees of FBT exempt and FBT rebatable employers are now subject to a separate single grossed-up cap of $5,000. This means that these employers now have to include salary packaged entertainment in their capping thresholds to determine whether they are subject to FBT on any excess of the cap.