Fringe Benefits Tax (“FBT”) Guidelines – Meal Entertainment
Actual Method After 31 March 2004
The methodology used to calculate FBT for Meal Entertainment (“ME”) changed (from the 12 week diary to the Actual basis) at the commencement of the new
FBT year on 1 April 2004 as follows:
 ME events occurring before 1 April 2004 should be coded using the Old category codes (see the table below); and
 ME events from 1 April 2004 should be coded using the New category codes (see the table below).
Meal Entertainment is:The provision of food or drink to employees and their associates that has the character of entertainment. The Australian Taxation Office (“ATO”) considers
business lunches & drinks, dinners, cocktail parties and staff social functions (if paid by UTS) to be subject to FBT. Functions that have alcohol are also subject to
FBT.
Meal Entertainment is Not:The provision of a light meal (finger food etc) for example a working lunch (sandwiches and orange juice) on UTS premises, or a morning or afternoon tea.
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Circumstances
FBT (ie, tax imposed on taxable transactions)
Social Function, Cocktail Parties
Social function held on or off UTS premises (e.g. Christmas party, year-end party,
cocktail party)
Prize Giving Ceremony (with alcohol) (**)
Prize Giving Ceremony (without alcohol)
Eligible Seminar (with alcohol, > 4 hours duration)
Light breakfast or light refreshments at seminar
Restaurant Meal (with or without alcohol) when travelling in Australia
Restaurant Meal (with or without alcohol) when travelling overseas
Restaurant Meal (with or without alcohol) & not travel related
Staff Meal Entertainment Overseas, more than usual meal
Any kind of Entertainment (eg with or without Performer) at taxable event
Food and drink consumed at café or restaurants
Employee, Spouse & Others at restaurant
Morning & Afternoon Teas, Light Lunch (eg Sandwiches) on UTS premises
Friday night drinks at the office (including “nibbles” )
Weekend planning retreat held at a hotel complex with conference facilities
 Basic lunch and dinner provided at hotel premises with no alcohol
Meal
Entertainment
No
Yes
FBT
Yes
Category Code for
ME Events
72810
71545
Yes
Yes
No
No
No
No
No
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
Yes
Yes
Yes
71545
71545
71505
71510
71510
71020
71120
71545
71555
71545
Yes
Yes
No
Yes
Yes
Yes
No
Yes
71545
71545
71505
71545
No
Yes
No
Yes
71505
71545
18 May 2004
Fringe Benefits Tax (“FBT”) Guidelines – Meal Entertainment
Actual Method After 31 March 2004
 Basic dinner with no alcohol but with entertainment (live band or
show)
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Farewell staff member, finger food & no alcohol
Gifts purchased for Clients/customers
Gifts purchased for Staff or Associates (if less than $300 gst inc value then no FBT)
Employee Benefits (taxable & salary packaged)
Christmas Party on or off UTS premises (even if <$300 / head, taxable)
Alcohol & finger food at the of Continuing Professional Development session
Conference Dinner at Restaurant
Overseas Alumni Graduation Dinner (**)
No
No
No
No
Yes
No
Yes
Yes
No
No
Yes/No
Yes
Yes
No
Yes
No
71505
71520
71518
71530
71545
71510
71545
71550
Note
(**) If staff are required to attend Alumni and Graduation dinners, FBT does not apply as the “otherwise deductible” rule applies. That is, the expense would be
otherwise income tax deductible to the staff member, if they were required by their employer to attend the function.
FBT Meal Entertainment (only) calculation applicable after 31 March 2006 - For Example:
A UTS employee take two externals for a meal at a restaurant and spends $110 (including GST).
Total Cost of meal (GST excluded)
Taxable component (after completing the Meal Entertainment form) = 33.3%
Grossed up for GST
* 1.1
Grossed up for FBT purposes
* 2.0647
Multiplied by the FBT rate
FBT applicable
$100.00
= $ 33.33
= $ 36.67
= $ 75.69
= * 46.5%
= $ 35.19
This calculation will be made on the new Meal Entertainment form.
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18 May 2004