Please refer to the table of major events and the flowchart to guide you in classifying common events that are held in the University.

The meal entertainment form must be attached to all payment requests that include Meal Entertainment provided to customers and staff to apportion the FBT liability.  The form is not required if the meal entertainment is provided to UTS staff only.  The full expense will attract FBT.

Food provided while travelling is not entertainment, as the meal (paid by UTS)  provided is sustenance. If there is an accompanying spouse / partner / associate and UTS pays for meals, FBT applies.

The ATO's interpretation of entertainment by way of food and drink for FBT purposes is published in Tax Ruling 97/17 and addendum  TR 97/17A .

Eligible Seminar

Food consumed at an employer paid eligible seminar or conference is not subject to FBT. That is, a conference, convention, lecture, etc. of at least four hours duration.

The following are not eligible seminars

  • Conducting normal business discussions; or
  • Meeting for the purpose of advertising the goods or services of a particular business; or
  • Meeting for the dominant purpose of providing entertainment.

Otherwise Deductible Rule

If staff are required to attend Alumni and Graduation dinners, FBT does not apply as the "otherwise deductible" rule applies. That is, the expense would be otherwise income tax deductible for the staff member, if they were required by their employer to attend the function.

Christmas Parties

UTS is an income tax exempt entity. The ATO does not permit a tax-exempt body to have exempt minor entertainment benefits. Consequently, UTS funded Christmas parties are subject to FBT.

Exempt UTS provided fringe benefits include:

  • Car parking ,
  • Childcare , at Blackfriars and the Kuring-Gai Campus. Magic Pudding is excluded.

Car parking benefit is an exempt benefit for UTS under section 58G (2), (3) of the FBT Act as UTS is a non-profit organisation.

Child care facilities provided on the employer's business premises is an exempt fringe benefit under the section 35.580 of the FBT Act and therefore also provides a salary sacrifice opportunity.

Minor Benefits

Minor benefit  exemption can only apply to a benefit that is provided in respect of an employee's employment where the value of the benefit is less than $300 (GST inc ) as of 1 April 2007. Please complete the declaration form for gifts with the value of $300(gst inc) and over and attach it to the invoice.  ( FBT Tip: If the value of the gift is => than $300(GST inc), request staff members to make contributions towards the gift to bring the value = or less than $299.00 to qualify FBT exemption).

However, the threshold is not the only criteria to be satisfied to apply minor benefit exemption.  There are other criteria and conditions that need to be satisfied before the benefit provided qualifies for FBT exemption under S.58P.

Factors to consider for minor benefit exemption are;

  • Frequency/regularity with which similar or identical benefits are provided . - If similar or identical benefits are provided to the employee more frequently and regularly, it is less likely to qualify for minor benefit exemption.
  • Aggregate value of the minor benefit and any associated benefits - The greater the aggregate value of the benefits, it is less likely the minor benefit exemption will apply. Associated benefits are basically those benefits that are similar or identical to the minor benefit provided.
  • Difficulty in valuing the minor benefit and any associated benefits - The more difficult it is to practically value the minor benefit and any associated benefits, it is more likely the minor benefit exemption will apply.
  • Circumstances in which the minor benefit and any associated benefits were provided - If the benefit is provided as a result of an unexpected contingency (eg unexpected overtime) it is more likely the minor benefit exemption will apply. NOTE: Benefits provided to an employee principally as a reward for services rendered is less likely to qualify for minor benfit exemption.

Exempt Benefits

Certain benefits are exempt from FBT. Work-related items under S.58X is one of the most popular FBT exemptions available to the employer.

Following items are generally FBT exempt;

  • An item of computer software.
  • Calculator, a tool of trade, briefcase etc
  • Protective clothing if required for the employee's employment.
  • Subscription and periodicals

Work related Items are FBT exempt only when it is used predominantly for work purpose.  This includes laptop computers, Mobile phones, PDA etc.  For the exemption to apply staff member must complete the declaration form and submit it to tax and insurance section.  Failure to do so would attract FBTand will be charged to the faculty/division.

Importance of Declarations

Declarations are required to reduce the amount of FBT paid by the University. Declarations are required for:

  • Motor vehicles odometer reading ; this declaration is required at the end of the FBT year (31 March)
  • Gifts to staff  equal to or greater than $300 (GST Inclusive)
  • Expense Benefit declaration (eg. when UTS reimburses an employee  or pays for a taxable benefit) are required when the benefit is received.
  • FBT Declaration form for work related items (mobile phone/internet) is required when the item is received.

Completed Declarations should be forwarded to Tax in the Financial Services Unit. Email: [email protected]

Reportable Fringe Benefits

Employers are required to complete the following process where they provide fringe benefits to employees:

  • Calculate the FBT payable in relation to fringe benefits provided to employees during the FBT year;
  • Remit the fringe benefits tax payable with respect to the benefits provided to employees during the FBT year; and
  • Record the grossed-up value of reportable fringe benefits on an employee’s payment summary where the combined total of those reportable fringe benefits is more than $2,000.

It should be noted that where the fringe benefit has no taxable value (e.g., due to employee contributions), or where the fringe benefit is exempt from FBT (e.g., a laptop computer), the fringe benefit does not need to be reported on the employee’s payment summary.

The reportable fringe benefits amount is the total of the grossed-up value of the individual fringe benefit amount. The grossed-up amount is, calculated by multiplying the reportable fringe benefits amount by 1.8692.

For additional information please refer to the ATO document titled -  Reportable Fringe Benefits - Facts for Employees .

Frequently Asked FBT Questions ( FAQs)

Answers to UTS relevant Frequently Asked Questions have been prepared.

If you have any FBT questions please email [email protected]

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AU – Travel for Work Can Have Tax Implications

Australia – if planning to travel for work, consider tax implications.

This GMS Flash Alert provides an overview of three separate documents released by the Australia Taxation Office in relation to employee travel. One draft ruling was simultaneously withdrawn. The current draft guidance suggests that for some globally-mobile employees, depending on the duration of their assignments, some of the benefits they are provided (e.g., accommodation) may be subject to Fringe Benefits Tax.

ATO Documents

Is there a “bright line” test to establish travelling for work or living away from home.

Hayley Lock

KPMG Australia

Daniel Hodgson

Mardi Heinrich

flash-alert-2021-091

While personal travel might not be on the cards for all yet, some recent releases from the Australian Taxation Office (ATO) mean that tax costs in Australia need to be front of mind when movement resumes. 1

The ATO recently released three separate documents in relation to employee travel and, simultaneously, withdrew one draft ruling. 

These latest releases are a continuation of a process that started in 2017 with the ATO seeking to clarify its position in relation to the tax treatment of employer-provided transport, accommodation, and meals.

WHY THIS MATTERS

An employee’s categorisation as travelling for work, living away from home, or indefinitely relocating, will determine the Australian tax treatment of transport, accommodation, and meal benefits (including allowances).

It is important for employers of internationally-mobile employees travelling into or out of Australia to have a clear view on this categorisation and the resultant impacts to avoid any unnecessary or unexpected tax costs.  This is particularly relevant for Fringe Benefits Tax (FBT) in Australia, where the liability rests with the employer and is currently 47 percent on the grossed-up value of the benefit (for example, if accommodation were subject to full FBT, then for every $100 spent on accommodation there would be roughly a corresponding $100 of FBT payable).

From a global-mobility perspective, the ATO had previously provided some guidance whereby international employees on short-term assignments to Australia for up to three months were travelling for work and, as such, not subject to FBT. 2   The current draft guidance suggests that for what are similar circumstances but a longer assignment period (expressed as 90 to 120 days), some of the benefits provided (e.g., accommodation) may be subject to FBT.  

Recent Releases

  • Final Taxation Ruling, TR 2021/1 Income tax: when are deductions allowed for employees’ transport expenses?
  • accommodation and food and drink expenses;
  • travel allowances; and
  • living-away-from-home allowances.
  • Draft Practical Compliance Guideline, PCG 2021/D1 : Determining if allowances or benefits provided to an employee relate to travelling on work or living at a location – ATO compliance approach.

Draft Ruling Withdrawn

  • TR 2017/D6 Income tax and fringe benefits tax: when are deductions allowed for employees’ travel expenses?

Given the significant impact the categorisation of an employee’s circumstances can have on the employer’s tax position, whether there exists a “bright line” test that can be used to establish if an employee is travelling for work or living away from home is a valid question and one that is asked often in practice.

The ATO’s prevailing view is that every scenario must be considered on its own merits considering the relevant “facts and circumstances.”  However, the ATO has also released some Practical Compliance Guidance (PCG) (currently in draft) specifically providing a “safe harbor” test. 3

PCG 2021/D1 highlights the ATO’s compliance approach when determining if allowances or benefits provided to an employee relate to travelling for work or living at a location.  The PCG incorporates a “day count” test, allowing employers a numerical basis for categorisation.  It is important to note, this also increases the possibility of automation of this aspect of the FBT process (among other things).

The compliance approach sets a “safe harbour” of an aggregate period of fewer than 90 days in an FBT year for presence at a temporary work location to be treated as travelling for work.  Provided that this requirement is met, PCG 2021/D1 allows an employee to have numerous short stints of travel of up to, and including, 21 continuous days.

The following table summarises the requirements for the PCG to apply:

flash-alert-2021-091

The PCG as a Guideline

It should be noted that the PCG only provides a guideline as to what will be accepted by the ATO as reasonable.  If a scenario does not meet the criteria, the PCG does not render the relevant expenses automatically taxable, rather, it will require the employer to collate more evidence to support a “travelling for work” position.  In an audit situation, the ATO will want to see evidence of how the employer has come to this conclusion, despite the PCG, and why.

Concluding Thoughts 

The introduction of the PCG and the safe harbour it offers will provide a set of rules that can be applied to data and help an organisation assess retrospectively which trips might not require further consideration to classify.

Similarly, the PCG provides an opportunity for employers to plan employee travel within these limits if it wishes to do so and other practical business realities allow it to do so.

Organisations may need support in navigating the relevant legislation, cases, and ATO guidance in considering all relevant facts and circumstances and helping employers classify their travelling employees correctly.

1  For related coverage, see GMS Flash Alert 2020-487 , 9 December 2020.

2  For prior coverage, see GMS Flash Alert 2020-113 , 25 March 2020.

3  Draft Practical Compliance Guideline, PCG 2021/D1 .

PEOPLE SERVICES IN AUSTRALIA

Dan Hodgson

Perth, Western Australia

Partner – People Services

Tel. +61 8 9278 2053

Direct Tel. +61 8 9278 2053

Mobile: +61 416 017 131

[email protected]  

Melbourne, Victoria

Partner – Deals, Tax & Legal People Services

Tel. +61 3 9838 4348

Direct Tel. +61 3 9838 4348

Mobile: +61 410 602 993

[email protected]

Ablean Saoud

Sydney, New South Wales

Tel. +61 2 9335 8550

Direct Tel. +61 2 9335 8550

Mobile: +61 421 052 596

[email protected]

Brisbane, Queensland

Tel. +61 7 3434 9176 

Direct Tel. +61 7 3434 9176

Mobile: +61 477 764 638

[email protected]

Jackie Shelton

Partner – Deals, Tax & Legal

Tel. +61 2 9335 8511

Direct Tel. +61 2 9335 8511

The information contained in this newsletter was submitted by the KPMG International member firm in Australia.

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In regards to FBT and a travel diary - what % would be the threshold of private incidental

travel diary fbt ato

in regards to a travel diary maintained - what would be the % threshold for the private portion to be considered incidental? Is it the same for someone who travels overseas vs someone who travels domestically?

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travel diary fbt ato

Hi @Timothy_mason_1 ,

When keeping a travel diary. it's important to record the hours for business and private. There isn't a percentage rate as such. It depends on each day's entries as they could vary.

It's the same principle when you travel domestically or overseas.

If you haven't already check out the information on our website where it talks about how to keep a travel diary .

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Tax deductions and FBT treatment of employee travel expenses

travel diary fbt ato

8 December 2021

The distinction between travelling for business purposes and living away from home is important to ascertain whether employee travel expenses such as accommodation, food and drink expenses are deductible expenses.

To help provide more clarity for taxpayers to ascertain whether employees are travelling or living away from home, the ATO has issued Taxation Ruling TR 2021/4 which provides the Commissioner’s position as to when an employee can deduct travel expenses for income tax and the employer can apply the ‘otherwise deductible’ rule for Fringe Benefit Tax (FBT) purposes.

TR 2021/4 explains the following:

When an employee can deduct accommodation and food and drink expenses under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) when they are travelling on work, including where it is necessary to apportion.

The FBT implications, including the application of the 'otherwise deductible’ rule, where an employee is reimbursed for accommodation, and food and drink expenses, or where the employer provides or pays for these expenses.

The criteria for determining whether an allowance is a travel allowance or a living-away-from-home allowance (LAFHA) benefit and the differences between them.

In addition, the ATO also issued Practical Compliance Guideline PCG 2021/3 which provides the ATO’s compliance approach to determine whether employees are travelling for work purposes or living away from their usual place of residence which should be read in conjunction with TR 2021/4.

Some key takeaways from TR 2021/4 and PCG 2021/3 are:

For an employee to be considered to be travelling for work purposes, they must be required by their employer to stay away from their usual residence overnight, for a relatively short period of time.

The criteria in PCG 2021/3 does not provide a specific test based on the number of days the individual is away. For example, travel for more than 21 days is not regarded as living at the location in all circumstances.

Being accompanied by an employee’s family does not necessarily mean that the employee should be treated as living away from home.

PCG 2021/3 now applies a 90-day threshold test based on an FBT year which can allow employers to apply this threshold test each FBT year.

PCG 2021/3 provides the type of records that should be maintained by employers to support the various criteria if an employer has determined that an employee is travelling for work purposes or living away from home.

TR 2021/4 and PCG 2021/3 apply both before and after the issue date. Where there is conflict with earlier draft rulings, the Commissioner will determine whether compliance resources will be used for income and FBT years to which these draft rulings apply.

Travelling for business purposes generally results in any benefits or allowances being outside the scope of FBT. Conversely, LAFHA and other living away from home benefits form part of the FBT regime.

If you think you may be impacted by this ruling or uncertain how you should classify employee travel, please speak to your adviser or contact the Tax Advisory team so we can conduct a health check of your employment taxes and related benefits.

Chris has over 20 years’ experience providing practical advice and compliance services in the various areas of employment tax such as payroll tax, Fringe Benefits Tax (FBT), superannuation guarantee, workers compensation and pay-as-you-go (PAYG) Withholding. Chris has extensive experience working with clients across many areas of tax consulting to manage employment taxes risks and exposure. He has proven this experience across a broad range of industries and client categories including private companies, large corporations, government agencies and family owned businesses. Chris specialises in providing tax effective solutions which also take into account other tax and commercial considerations. My Specialty • Employment Taxes • Global Mobility

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Fringe benefits tax - a guide for employers

  • This document has changed over time. View its history .

Chapter 4 - Fringe benefits tax record keeping

ATO references: NO Fringe benefits tax - a guide for employers

Fringe benefits tax – record keeping exposure draft legislation

Key documents.

Exposure Draft 78.2 KB

Exposure Draft 50.2 KB

Explanatory Materials 126.93 KB

Explanatory Materials 47.62 KB

Travel Diary Legislative Instrument 459.6 KB

Travel Diary Legislative Instrument 81.29 KB

Travel Diary Explanatory Statement 549.81 KB

Travel Diary Explanatory Statement 86.58 KB

Relocation Transport Explanatory Statement 685.46 KB

Relocation Transport Explanatory Statement 82.73 KB

Relocation Transport Legislative Instrument 458.9 KB

Relocation Transport Legislative Instrument 78.14 KB

The Government is introducing legislation to reduce fringe benefits tax (FBT) record keeping compliance costs for employers who maintain good corporate records.

This measure was initially announced in the 2020-21 Budget. The proposed legislation gives the Commissioner of Taxation the power to modify, by legislative instrument, existing FBT record keeping obligations to allow employers to rely on existing corporate records, rather than the employee declarations and other prescribed records, to finalise their FBT returns where the Commissioner considers the alternative records adequate.

Exposure draft legislation, Treasury Laws Amendment (Measures for Consultation) Bill 2022: FBT record keeping, and associated draft explanatory material, have been released for public consultation.

Exposure draft legislative instruments and associated explanatory material dealing with travel diaries and relocation transport expense payments have also been released for public consultation. Interested parties are invited to provide comments.

Comments on the draft legislative instruments and associated explanatory material will be shared with the Australian Taxation Office who have developed and released this material for public consultation.

Submissions

9 submissions were received for this consultation.

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COMMENTS

  1. Keeping travel expense records

    Travel diary or similar record of your travel activities. You need to keep your travel expense records for 5 years from the date you lodge your tax return. If you don't keep written records of your travel expenses, you can't claim your travel expenses as a deduction. If you receive a travel allowance from your employer, you may be eligible for ...

  2. 2023 FBT series: When do you need to keep a travel diary?

    There are currently two circumstances under the Fringe Benefits Tax Assessment Act 1986 in which an employee is required to maintain a travel diary in order to allow the employer to apply the otherwise deductible rule to the work-related component of their travel expenses: The employee was travelling overseas for a continuous period of more ...

  3. Claiming a tax deduction for business travel expenses

    As Rebecca is travelling for more than six nights, she keeps the below travel diary. Travel diary for May: Saturday 9 May - 10.00am flight Q13 to London (via Dubai) Sunday 10 May - Arrive London 1.00pm local time. Bus to hotel in Chelsea 3.00pm; Monday 11 May - Rest day; Tuesday 12 May - Chelsea flower show set-up day from 9.00am

  4. MT 2038

    FBT travel diary requirements. An employee must keep and give . his employer a travel diary in situations where the employer . pays or reimburses the employee's expenses of travel outside . Australia, in order that the employer can claim a reduction in . the taxable value of the benefit. Similarly, a travel diary

  5. 2023 FBT series: Accommodation, food and drink expenses

    13 April 2023. In August 2021, the Australian Taxation Office (ATO) finalised Taxation Ruling TR 2021/4 and PCG 2021/3, which provide guidance on the income tax deductibility of accommodation, food and drink expenses incurred in connection with travel. To the extent that an employer provides these types of benefits to employees, these rulings ...

  6. 2023 FBT series: Travel ruling tips and tricks

    2023 FBT Series: New travel ruling guidance - Transport expenses. In February 2021, the Australian Taxation Office (ATO) released Taxation Ruling TR 2021/1, which provides guidance on the income tax deductibility of transport expenses incurred in connection with travel. To the extent that an employer provides these types of benefits to ...

  7. Tax deductions and FBT treatment of employee travel expenses

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  8. PDF FBT Guide

    FBT GUIDE. TRAVEL. V2017.8. 1. INTRODUCTION. This Fringe Benefits Tax (FBT) Guide is written for University employees. The focus of this FBT Guide is the FBT implications on travel. University employees must always consider the total cost of providing fringe benefits before they are provided.

  9. UTS Tax eManual: Fringe Benefits Tax (FBT)

    Travel expenses are exempt from FBT only when travel diary is maintained by the employee showing detailed activity taken while on approved travel. ... FBT applies. The ATO's interpretation of entertainment by way of food and drink for FBT purposes is published in Tax Ruling 97/17 and addendum TR 97/17A. Eligible Seminar.

  10. PDF Fringe Benefits Tax (FBT) Travel Diaries

    Fringe Benefits Tax (FBT) Travel Diaries CRICOS Provider No. 00103D ABN 51 818 692 256 What is a Fringe Benefits Tax (FBT) Travel Diary? A 'travel diary' is a diary or similar document which provides a written record of events undertaken by a person whilst they were travelling, disclosing the details and nature of the events undertaken.

  11. AU

    KPMG Australia. While personal travel might not be on the cards for all yet, some recent releases from the Australian Taxation Office (ATO) mean that tax costs in Australia need to be front of mind when movement resumes. 1. The ATO recently released three separate documents in relation to employee travel and, simultaneously, withdrew one draft ...

  12. In regards to FBT and a travel diary

    ATO Community / Tax & Super for Business / Lodging And Reporting; In regards to FBT and a travel diary - what % would be the threshold of private incidental. Save. Author: Timothy_mason_1 ... When keeping a travel diary. it's important to record the hours for business and private. There isn't a percentage rate as such.

  13. Tax deductions and FBT treatment of employee travel expenses

    TR 2021/4 explains the following: When an employee can deduct accommodation and food and drink expenses under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) when they are travelling on work, including where it is necessary to apportion. The FBT implications, including the application of the 'otherwise deductible' rule, where an ...

  14. PDF 12.01.02.01 FBT FactSheet Travel

    FBT and travel. The Australian Taxation Office (ATO) requires that all travel undertaken by an employee and funded or sanctioned by the employer must be primarily for business purposes. Travel costs incurred by an employer on behalf of an employee which are primarily for private purposes cause an FBT liability to be imposed on the employer.

  15. PDF Format of the Travel Diary

    The Australian Tax Office (ATO) requires that an employee must keep a travel diary whenever the travel is for a period of more than five consecutive nights. A travel diary is not required where the travel is for a period of five nights or less. Format of the Travel Diary A daily record of each business activity undertaken during the travel must ...

  16. ATO guidance on costs of travelling

    On 17 February 2021, the Australian Taxation Office (ATO) released the following new guidance in relation to whether an employee is "travelling on work" or otherwise, and the income tax and fringe benefits tax (FBT) treatment of associated travel expenses: Draft Taxation Ruling TR 2021/D1: Income tax and fringe benefit tax: employees ...

  17. ATO publishes guidance on tax treatment of travel expenditure

    Draft Practical Compliance Guideline (PCG) 2021/D1 - Determining if allowances or benefits provided to an employee relate to travelling on work or living at a location - ATO compliance approach. These newly published products replace previous ATO draft guidance TR 2017/D6 which has been withdrawn. The subject matter of TR 2021/1 is ...

  18. Travel expenses

    As Rebecca is travelling for more than 6 nights, she keeps the below travel diary. Travel diary for May: Saturday 9 May - 10.00am flight Q13 to London (via Dubai) Sunday 10 May - Arrive London 1.00pm local time. Bus to hotel in Chelsea 3.00pm; Monday 11 May - Rest day; Tuesday 12 May - Chelsea flower show set-up day from 9.00am

  19. Record keeping exceptions for travel allowance expenses

    your travel allowance expenses are within the reasonable amounts. If you meet these conditions you don't need to keep written evidence of your accommodation, food and drink and incidental expenses, or a travel diary. But you still need records showing that you incurred the expenses on work-related travel. If your deduction for travel allowance ...

  20. FBT record keeping relief for employers

    Draft FBT instruments. Following a review of record keeping requirements last year, proposed changes to travel diary and relocation transport records were released, and the ATO has now issued the following four draft instruments for consultation: LI 2023/D3 in respect of overseas employment holiday transport

  21. Employee travel costs

    Deductibility of travel expenses. The general principles for determining when travelling expenses are deductible (and 'otherwise deductible' for FBT purposes) are that the expenses must be incurred in gaining or producing the employee's assessable income and not be of a capital, private or domestic nature. Where travel costs are not ...

  22. Fringe benefits tax

    A travel diary shows where the activity took place, the date and the approximate time when the activity commenced, the duration and the nature of the activity. If the provision of the expense payment or residual benefit is subject to a consistently enforced prohibition on private use and would result in a taxable value of nil, the requirement ...

  23. Fringe benefits tax

    Relocation Transport Legislative Instrument 458.9 KB. Relocation Transport Legislative Instrument 78.14 KB. The Government is introducing legislation to reduce fringe benefits tax (FBT) record keeping compliance costs for employers who maintain good corporate records. This measure was initially announced in the 2020-21 Budget.