Many employees are aware that a great benefit of employment is salary packaging. Up to $15,900 can be salary packaged pre-tax each year for expenses like, rent, mortgage, loans and school fees. But the additional limit of $2,650 for holiday accommodation and meal entertainment is often overlooked. So, let’s get back to basics and explain how it all works!
Meal Entertainment
For the purposes of salary packaging, ‘meal entertainment’ basically means ‘dining expenses’. It needs to be a dine-in meal for at least two people. Expenses include:
- Dine-in meals at restaurants, pubs, clubs, cafes and bistros.
- Catered functions where the venue/caterer provides an invoice (e.g. weddings, 21st birthdays, engagement parties, etc.).
Other food or entertainment costs are excluded and cannot be claimed. Common exclusions include:
- Takeaway meals.
- Self-catered events and parties.
- Drinks-only purchases, where there is no meal attached (e.g. a coffee).
- Light refreshments, such as a cake.
- Entertainment not related to dining (e.g. movie tickets, theme park entry, etc.).
Holiday Accommodation
You can claim the cost of accommodation used for recreational purposes. Typical eligible expenses (local or overseas) include:
- Hotel, motel, B&B and resort accommodation.
- Holiday home rentals, including Airbnb, Stayz, etc.
- Cruises.
- Cabins.
The benefit also extends to the hire of a venue for recreation/celebrations, including:
- Hall, venue or marquee hire (weddings, 21sts, etc.).
- Reception venue hire (just the venue – not cars, photography, music, etc.).
The benefit is limited to accommodation and hire of a venue. Exclusions include:
- Travel (airfares, car hire, train, etc.) and tour costs.
- Incidental costs (e.g. minibar, dry cleaning).
- Amusement hire (e.g. indoor play centres).
- Purchase of timeshare, holiday homes and memberships.
- Annual fees for permanent caravan or site hire.
- Costs related to persons not from your immediate family.
The Annual Limit
The annual pre-tax limit for holiday accommodation and/or meal entertainment expenses is $2,650. It’s one combined limit. As with other salary packaging, the payments limit is calculated on the year commencing 1 April and ending 31 March.
Reporting
The benefit is reported on your Income Statement at tax time. The value reported is the ‘grossed-up’ value, being a maximum of $2,650 x 1.8868 = $5,000 reportable fringe benefits. You can learn more about grossing-up and reporting by reading our fact sheets.
How to Utilise the Benefits
There are two ways to access these benefits.
1. Upload Invoices to GO Salary
Simply hang on to your dining and accommodation invoices after you pay and then log in to your GO Salary portal. On the ‘My Salary Package’ page, there will be a button to claim your expenses by uploading your proof.
2. Use a Meal Entertainment Card
You can order a Meal Entertainment Card via the ‘My Salary Package’ page in your GO Salary portal. You can nominate how much per pay (e.g. $100, $50) you would like to be taken pre-tax from your pay and deposited to the card. Then, simply use the card to pay for your dining and accommodation expenses. There is no requirement to keep proof. You must have sufficient balance to pay for the expenses as it is a debit card. Funds on the card must be used by 31 March each year.
You can learn more about both methods over on the fact sheets page.
Impact on Fortnightly Pay
The amount claimed will be deducted from your pay pre-tax, in addition to any other salary packaging benefits. The amount deducted is then either paid into your bank account as reimbursement for the proof provided (method 1 above) or paid to your Meal Entertainment Card (method 2 above).
Questions?
You can learn more across this very website! There are fact sheets, calculators and videos. Of course, please contact our team if you have any further questions or would like assistance. Members can even send us a direct message via their GO Salary inbox!