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edadmin:salarypackaging_meals

salary packaging meals and entertainment

introduction

  • if an employer provides non-salary benefits, these are called Fringe Benefits, and usually the employer will have to pay a tax on these called Fringe Benefits Tax (FBT)
  • certain not-for-profit organisations such as public hospitals, private not-for-profit hospitals or Public Benevolent Institutes (PBIs) are exempt from paying FBT for certain items, one of these is meals and entertainment - but with rather strict retrictions.
  • abuse or ignorance relating to these restrictions may lead to investigation for fraudulent practices by one of, or more - professional registration board, ATO, employer or police as has recently occurred in WA.
  • the main purpose of these exempt items is to assist these organisations in being able to competitively attract staff from the private sector, while at the same time providing some spending stimulus to pubs and restaurants which suffered with the introduction of GST and then with the recession.
  • you are required to keep all original invoices and receipts for a period of seven years.
    • If you cannot provide an invoice, your package may be adjusted - ie. you will have to pay that invoice in post-tax dollars.
  • the disturbing aspect is the often nebulous and changing interpretations of the restrictions which could expose one to inadvertent fraudulent conduct and investigation - perhaps think twice about getting a card for your spouse or child!
  • this is derived from information available as at Oct 2009 in Victoria.

what you may salary package for meals and entertainment

  • dining at a restaurant or café, with your spouse or children
  • dining at a club or pub with colleagues
  • dining at a fast food restaurant with friends
  • hiring professional caterers to supply food and drink for a wedding, engagement or birthday party
  • attending a ball, gala event or charity dinner

what you CANNOT salary package for meals and entertainment

  • takeaway, home delivery or drive through meals
    • this seems to be a new restriction, so you must eat in at MacDonald's or the Fish and Chip shop (if they take credit card which few do)
    • presumably, this also means as a benevolent ED director that you can no longer order in 10 pizzas to reward your busy staff and claim it on your salary packaging - this would be a pity if this is indeed the correct interpretation - looks like I might have to reconsider my practices.
  • room service meals - again this seems to be a new restriction or interpretation, but it would seem that if the meal is for more than one person, it should still be eligible.
  • food consumed in-flight
  • grocery and supermarket bills
  • coffees, cakes, sweets and other snack or party foods (unless included as part of a larger bill for a qualifying meal) - again, this seems to be a new interpretation - I would think having coffee and cake in a cafe with a friend would still be allowable, but who knows?
  • food and drink consumed at the theatre, movies, sporting or other entertainment events
  • drinks that are not purchased in conjunction with a meal
  • food or drinks purchased for entertaining at home, a picnic or some other public place
  • individual receipts from a cafe or kiosk at your place of work
  • solo meals - you need to be eating with someone else to be able to claim - you don't have to pay for them just be with them.

examples which may be regarded as fraudulent claims

clearly fraudulent

  • going to dinner with other employees and each claiming the same invoice to the full amount
  • submitting claims from receipts found in rubbish bins, etc that you have not paid for
  • claiming the same receipts at more than one place of employment
  • changing the amounts on the receipts - ie. forgery of documents

maybe fraudulent

  • going to dinner with friends and paying for the whole meal on your card then being reimbursed in cash from your friends - presumably, if you are not reimbursed then this is not a problem.
  • making a claim for a dinner that you did not attend - presumably though, given you can purchase a card for your spouse or child, you personally do not need to attend, as long as the card holder did.
edadmin/salarypackaging_meals.txt · Last modified: 2009/10/26 13:12 (external edit)