Entertainment and fringe benefits

The provision of entertainment means the provision of:

  • entertainment by way of food, drink or recreation
  • accommodation or travel in connection with, such entertainment.

Entertainment includes, for example:

  • meals and drinks, cocktail parties and staff social functions
  • sporting or theatrical events, sightseeing tours and holidays
  • entertaining employees and non-employees (for example, clients) over a weekend at a tourist resort or providing them with a holiday.

Recreation includes amusement, sport and similar leisure pursuits (for example, a game of golf, theatre or movie tickets, a joy flight or a harbour cruise).

Providing entertainment may give rise to various types of fringe benefits.

For example:

  • the cost of theatre tickets purchased by an employee and reimbursed by the employer may be an expense payment fringe benefit
  • providing food and drink may be a property fringe benefit
  • providing accommodation or transport in connection with entertainment may be a residual fringe benefit
  • entertainment provided by an employer who is exempt from income tax (for example, a registered charity) may be a tax-exempt body entertainment benefit.

Visit the ATO’s website for useful links or call Omnis Group in Perth on 08 9380 3555.

Source: ATO