FBT Exempt PBIs (Public benevolent institutions and health promotion charities) and FBT Exempt PNPHs (Public and non-profit hospitals and public ambulance services) now have an additional $5,000 meal entertainment cap on salary sacrificed Meals/EFLE entertainment benefits. This is a separate and specific cap in addition to the existing general exemption caps of $17,667 for PBIs and $31,177 for PNPHs for the 2017 FBT year.
We have added a new Entertainment Type column within the Income Tax Exempt Body Entertainment (Actual) and Entertainment (Actual) workpapers (the workpaper available will depend on the entity’s ITEB status) to enable the calculation of this new meal entertainment cap to be performed by easyFBT. The new Entertainment Type column requires each entertainment benefit to be classified as either Meals, EFLE or Recreation.
Note: PBI and PNPH employers only need to enter Salary Sacrificed Meals or Salary Sacrificed EFLE entertainment benefits so ensure that you select Yes within the Salary Sacrificed Benefit? field for these to be included within the Meal Entertainment capping calculation. Any non-salary sacrificed Meals or EFLE entered will be ignored within easyFBT for PBI and PNPH employers as these are still exempt from FBT and not reportable on employee payment summaries.
Once the $5,000 Meal Entertainment cap is exceeded by an employee then any of the excess amounts that can’t be included within the employee’s general exemption cap will be included in the non-exempt amount (amounts over the caps) and FBT will be payable on these.
Amounts within the caps are automatically excluded from within the Q14C: Aggregate non-exempt amount calculation on the ATO Fringe Benefits Tax Return and are separately detailed within the PBI Capping and PNPH Capping FBT Reconciliation reports.
Salary sacrificed Meals and EFLE entertainment valuation method
All salary sacrificed Meals and EFLE entertainment benefits must be valued using the Actual method as these can’t be valued using the concessional 12 Week or 50/50 Split methods.
New RFBA requirements for salary sacrificed Meals and EFLE Entertanment
From the 2017 FBT Year all salary sacrificed Meals/EFLE entertainment benefits must now be included as reportable fringe benefit amounts (RFBs) for inclusion on your employee’s payment summary where the total of all RFBs for the employee exceeds the $2,000 taxable value cap.
If you have any questions, need any help or want to provide your feedback on this new functionality within easyFBT 2017 then please contact us via either the Help link on our website or email us at firstname.lastname@example.org.