The Government has announced the introduction of a separate grossed up cap of $5,000 for FBT salary packaged meal entertainment and entertainment facility leasing expenses.
The elective valuation rules are no longer to be used to calculate the taxable value of these benefits. Benefits exceeding the$5,000 grossed-up cap can be counted when calculating whether an employee exceeds their existing FBT exemption or rebate cap.
All salary packaged meal and other entertainment benefits will become reportable to the employee’s payment summary if they exceed the reporting threshold.
At present, employees of public benevolent institutions and health promotion charities have a $30,000 FBT exemption cap (this will be $31,177 for the first year of the measure) and employees of public and not for profit hospitals and public ambulance services have a $17,000 FBT exemption cap (this will be $17,667 for the first year). These employees can also benefit from salary sacrifice meal and entertainment benefits with no FBT payable by the employer and without it being reported.
Those employees of rebatable non for profit organisations can salary sacrifice meal entertainment benefits however, the employers only receive a partial FBT rebate, up to a standard $30,000 cap ($31,177 for the financial year).
The changes will be effective from 1 April 2016 to coincide with the start of the FBT year.