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Important Government changes to Meal Entertainment and Venue Hire benefits

5/13/2015 8:44:44 AM

Changes to Meal Entertainment and Venue Hire benefits were announced in the 2015 Federal Budget on Tuesday evening 12 May.

What are the changes?

Effective 1 April 2016, an annual ‘grossed-up’ limit of $5,000 will be introduced to Meal Entertainment and Venue Hire benefits (also known as Entertainment Facility Leasing).  

This new limit is a combined cap across both benefits applicable each Fringe Benefits Tax (FBT) year (from 1 April to 31 March the following year).

Please note, the new cap limit for Meal Entertainment and Venue Hire is in addition to the existing cap limit for everyday living expenses – which includes mortgages, rent and credit card payments – and does not affect the claiming of these benefits in any way.

What does grossed-up value mean?

The grossed-up taxable value of a benefit is the salary that employees would have to earn in order to purchase the benefit from after-tax dollars. The actual dollar amount that can be spent per FBT year for both benefits combined will be between $2,300 and $2,550 depending on whether or not the expense incurred is subject to GST.

What happens next?

We will be emailing employees currently packaging Meal Entertainment and/or Venue Hire to advise them of this change.

However, there is no immediate action employees need to take – they may continue to salary package these benefits as per usual until 31 March 2016. It is also important to note that this change will need to be passed through Parliament before coming into effect.

There were no other changes contained in the Budget of direct relevance to salary packaging benefits.

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