Fringe benefits tax (FBT) and entertainment for government

About this guide

This guide helps government sector staff to understand how FBT and entertainment works and to decide whether or not they may have to pay FBT.

You should use this guide if you are involved in the administration of fringe benefits tax (FBT) for a government organisation. The tables and examples in this guide should also provide assistance to government sector staff who provide employees with food and drink, or leisure activities. They will need to know if these activities may be classified as entertainment and possibly incur an FBT liability.

In this guide, we help you to:

  • identify when an event is likely to be classified as entertainment
  • decide whether your organisation has an FBT liability
  • calculate the taxable value of entertainment benefits using the actual method, and
  • keep records so that you can calculate your organisation's FBT payable.

We also:

  • explain how you can reduce your organisation's FBT liability, possibly to nil, and
  • provide examples of common situations in which entertainment is provided by government departments.

The FBT treatment of entertainment provided by Australian Government entities depends on your income tax status. Your organisation will be either:

  • income tax-exempt
  • income tax-exempt but pay income tax equivalents, or
  • income tax paying in accordance with Australian income tax laws.

Most Australian Government organisations are income tax-exempt. The information in this publication is for income tax-exempt organisations, including those organisations that pay income tax equivalents.

If your organisation pays income tax, please refer to our web guide Fringe benefits tax and entertainment for small business for assistance with the FBT treatment of entertainment.

For more information about other types of benefits, please refer to Fringe benefits tax - a guide for employers (NAT 1054)

    Last modified: 06 Jun 2008QC 19918