The Budget confirmed the Assistant Treasurer's recent announcement that the Government would introduce a grossed-up cap of $5,000 per year on the FBT concessions for salary-sacrificed meal entertainment and entertainment facility leasing expenses (meal entertainment benefits) for employees of certain not-for-profit organisations.
(ie public and not-for-profit hospitals, public ambulance services, public benevolent institutions (except hospitals) and health promotion charities).
The FBT cap on exempt benefits provided by these NFPs is currently (as from 1 April 2015) $17,667 for public and not-for-profit hospitals and public ambulance services and $31,177 for public benevolent institutions (except hospitals) and health promotion charities. In addition to the capped exemptions, employees of these NFPs can also salary sacrifice meal entertainment benefits with no FBT payable by the employer. These benefits will be subject to a separate grossed-up cap of $5,000 per year per employee.
All meal entertainment benefits will also become reportable benefits and thus will count towards an employee's "reportable fringe benefits amount" for an income year. An employee has a reportable fringe benefits amount" if their individual fringe benefits amount for the relevant FBT year (ie the FBT year ending on the previous 31 March) exceeds $2,000. At present, meal entertainment fringe benefits are "excluded benefits" and therefore are ignored in working out an employee's reportable fringe benefits amount.
Date of effect
These measures will apply from 1 April 2016.