Christmas year-end tax checklist for business

1 Cash bonuses Please circle
Has the business paid employees with cash bonuses as a year-end reward? Yes No
If yes, has the employer considered the following: Yes No
Timing: Whether the amount would be paid in December or in the new year? Should it be provided for in the accounts at month-end? Yes No
PAYG withholding: Has the appropriate amount of PAYG withholding for lump sum payments been calculated and provided for? Yes No
Superannuation Guarantee: Has superannuation guarantee of 9.5% (for 2014-15) been provided for with respect to the relevant bonus paid? Yes No
Payroll tax: Have state-based payroll taxes been considered with respect to bonus? Yes No
Note that a deduction should be available for bonuses paid under the general deduction provision as a business cost. Yes No
2 Christmas parties and related entertainment and transport (employees and associates)
Has the business provided food, drink, entertainment and associated travel
(ie. ‘meal entertainment’ benefits) during the period to employees and or associates?

If yes, have the following been considered?
Yes No
Basis for valuing ‘meal entertainment’

Please circle method chosen
What basis has the business adopted (or intends to adopt) in valuing ‘meal entertainment’ fringe benefits for the FBT year? Actual basis (ie. property, expense payment or residual)
The business must value each ‘meal entertainment’ based on the fringe benefit type (eg. property, expense payment or residual).
Exemptions such as minor benefits exemption, taxi travel exemption and on-site consumption may be applied.
Continue below for outcomes.
50/50 split or 12 week register
The business must value all ‘meal entertainment’ provided during the FBT year using one of these methods.
No scope available for applying FBT exemptions to such benefits (eg. minor benefits exemption). That is, individual benefits cannot be selected for exemption.
Skip to item 3 below.
Tax implications of ‘meal entertainment benefits’
If an actual basis of valuing ‘meal entertainment’ is chosen, the following tax implications should be considered:
Scenario FBT/payroll
tax liability?
Income tax
deduction?
GST credit
available?

Food and drink provided on business premises

Has the employer provided ‘meal entertainment’ to employees (and/or associates):

on a working day on business premises, and
consumed by current employees?
If yes:
Employee: No (1) No No
Associate: Yes Yes Yes
Associate (minor benefit): No (2) No No

Food and drink provided offsite

Has the employer provided ‘meal entertainment’ to employees (and/or associates) offsite (eg. at a restaurant)? If yes:

If property, expenses payment or residual fringe benefit provided: Yes Yes Yes
If minor benefit provided: No (2) No No

Transport to and from function

Has the employer provided transport to or from the function to employees (and/or their associates)?
If yes, have the following been considered?

If taxi travel:      
Employee:      
From work premises to function (vice versa) No (3) No No
From function to non-work location (vice versa) Yes Yes Yes
Minor benefit (if no exempt taxi travel) No (2) No No
Associate:      
Any taxi travel (irrespective of origin or destination) Yes Yes Yes
Minor benefit No (2) No No
If transport other than taxi (eg. hired bus)      
Employee:      
Any travel (irrespective of origin or destination) No (3) No No
Minor benefit Yes Yes Yes
Associate:      
Any travel (irrespective of origin or destination) Yes Yes Yes
Minor benefit No (2) No No
3 Christmas gifts
Please circle
Has the employer provided gifts to employees or associates?
If yes, the tax implications for certain gifts are as follows:
Yes No
Scenario FBT/payroll
tax liability?
Income tax
deduction?
GST credit
available?

Non-entertainment examples

Gift vouchers – department store (eg. Myer/Target) Yes (4) Yes Yes
Hampers (containing consumables) Yes (4) Yes Yes
Consumables – such as chocolates Yes (4) Yes Yes
Electronic equipment (eg. iPod) Yes (4) Yes Yes
Toys and kids’ gifts Yes (4) Yes Yes

If above gifts, or similar, a minor benefit

No (2) Yes Yes

Entertainment examples

Champagne Yes (4) Yes (6) Yes
Dinner voucher Yes (5) Yes (6) Yes
Theatre tickets or similar Yes (4) Yes (6) Yes
If above gifts, or similar, a minor benefit No (2) No No
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