accommodation and travel in connection with entertaining clients and/or employees over a weekend at a tourist resort.Recreation that is entertainment includes amusement, sport and similar leisure time activities, for example: End of example When recreation is entertainment Food or drink provided in a function room, hotel, restaurant or coffee shop is more likely to be entertainment.ĭecision – looking at the answers to these questions, providing the farewell function for Gabrielle as outlined above would be classified as entertainment. Where – the food or drink is being provided in a private function room at the local hotel.When – although in this instance food or drink will be provided during working hours it has the character of entertainment as it a social function.What – light refreshments are often not considered to be entertainment however as alcohol will be provided in this situation it is considered to have a social context.Why – the food and drink in this situation is being provided for a social situation where the purpose of the function is for employees, associates and clients to enjoy themselves.Paul has hired a mini bus to transport guests to the venue. In recognition of Gabrielle's loyalty and dedication to the company over the last six years her employer, Paul, wants to host a late afternoon farewell function at a local hotel.ĭrinks including alcohol and light refreshments such as finger foods will be provided to invited staff, clients and Gabrielle's family members. Gabrielle is currently employed by Twinsprings Pty Ltd and will soon be leaving the company for an overseas position in Canada. Food or drink provided off your business premises, such as at a function room, hotel, restaurant or consumed with other forms of entertainment, is more likely to be entertainment.Įxample: Determining whether food or drink is entertainment.Food or drink provided on your business premises or at the employee's usual workplace is less likely to be entertainment.Where is the food or drink being provided?.This is because in the majority of these cases, the food or drink is provided for a work-related purpose rather than for an entertainment purpose. Food or drink provided during work time, during overtime or while an employee is traveling for work is less likely to be entertainment.When is the food or drink being provided?.The more elaborate a meal, the more likely it becomes that entertainment arises from eating the meal.What type of food or drink is being provided?.Providing food or drink in a social situation where the purpose of the function is for employees to enjoy themselves is likely to be entertainment.Providing refreshments to enable the employee to complete the working day in comfort is not generally entertainment.Why are you providing the food or drink for employees?.None of the factors on their own will determine if the food and drink provided is entertainment, but the first two questions for consideration are the more important factors. To determine whether food or drink provided to a person is entertainment, you need to look at the following factors. If required, report an amount on the employee's payment summary Step 1 – When food, drink or recreation is entertainment Food or drink Decide if you can reduce your FBT payable on the food, drink or recreationĦ. Determine whether the food, drink or recreation is entertainment.ģ. Steps to providing food and drink or recreation to employeesġ. If you sometimes provide these events for your staff you will need to know whether the events will be classified as entertainment and require you to pay fringe benefits tax (FBT).

celebrations for achieving sales targets.

Some examples of providing entertainment are:

paying or reimbursing expenses incurred in obtaining something covered by the above points.

providing accommodation or travel in connection with such entertainment, or.

providing entertainment by way of food, drink or recreation.

When we talk about you providing entertainment we mean: This may happen in a variety of circumstances and for a number of different employees and their associates. As an employer, you will, from time to time, provide your employees with food and drink, gifts, and possibly leisure activities.

Live entertainment expense bar