When a meal is a board fringe benefit
For an employee meal to be a board fringe benefit, all of the following must apply:
- You provide accommodation to the employee.
- You ordinarily provide at least two meals a day under an industrial award or employment arrangement.
- The meal is supplied by you as the employer (or a related company in a wholly owned group).
- The meal is prepared and supplied on your premises or worksite, or a place adjacent to the worksite.
These arrangements could include, for example, meals provided:
- in a dining facility located on a remote construction site, oil rig or ship
- to a live-in housekeeper or resident teachers in a boarding school.
Meals provided to family members living with an employee are also treated as board fringe benefits if all the above conditions apply.
Meals that aren't board fringe benefits
Meals aren't board fringe benefits if they are provided:
- at a party, reception or other social function
- in a dining facility open to the public, except for board meals provided to employees of a restaurant, motel or similar establishment
- as incidental refreshments, such as morning and afternoon tea
- in a facility mainly used by a particular employee
- to an employee of a primary production business in a remote area.
What to do if you provide a board fringe benefit
You need to:
- work out the taxable value of the board fringe benefit
- keep the appropriate records
- calculate how much FBT to pay
- lodge your FBT return
- pay the FBT amount
- check if you should report the fringe benefit through Single Touch Payroll (or on your employee's payment summary).
Taxable value of a board fringe benefit
The taxable value of a board fringe benefit is $2 per meal per person ($1 per person if under the age of 12).
You reduce this by any amount the employee pays for the meal.
Example: taxable value of a board fringe benefit
An employee is provided with accommodation and meals at their place of work.
The employee contributes $182 per week ($26 per day) towards their accommodation and meals.
The employer apportions the contribution as follows:
- $6 per day towards the 3 meals provided each day – this reduces the taxable value of each board fringe benefit to nil
- $20 per day towards accommodation.
Reductions and concessions
You can reduce the taxable value of an expense payment fringe benefit (or eliminate it entirely) if your employee could have claimed the expense as an income tax deduction had they paid for it themselves. This is called the otherwise deductible rule and can reduce your FBT liability.
Records you need to keep
When record keeping for FBT, you must keep records that:
- show how you calculated the taxable value of the board fringe benefit
- support any exemption or concession you used.