For certain not for profit organisations the government is closing a major salary packaging opportunity. Those affected will include some charities and hospitals that allowed their employees to enjoy tax free spending on ‘meal entertainment’ benefits included; cruises, weddings, holidays and meals and alcohol in restaurants.
The change limits the access to benefits and places a $5,000 limit grossed-up cap per person. Any additional meal entertainment exceeding this grossed up cap can be counted as part of the employee’s existing FBT exemption or FBT rebate cap.