FBT - Christmas Parties & Taxi Fares

Some employers, who are commendably anxious to protect their employees and clients from the drink/driving laws, also pay for taxis to take employees to and from the place of entertainment.

For FBT purposes there may be different consequences for payment of the taxi fare.  In respect of clients, the taxi fare is considered to be part of the entertainment expense and no deduction is allowable.  For employees, if the fare is for travel from home to the place of entertainment (not being their place of employment) and return home again, the benefit is considered to be for the facilitation of entertainment and is not a separate benefit from the entertainment itself.

The result is that the employer would then have to rely on the total entertainment package being under $300 for the minor benefit rule to apply.

However, if the Christmas function is held on the employer’s premises and the employer chooses to send the employee home by taxi, the taxi trip is FBT exempt provided that the trip is a single trip, which began at the employee’s place of work.  The exemption would apply if the employee went from the work place to home, or any other place.  However, the exemption would not apply if the trip was broken and continued at some other time.  For example, the employee gets a taxi from the workplace and goes to a nightclub; that trip is deductible and exempt from FBT.  If the employee later gets another cab to home, that leg of the trip would be deductible to the employer but FBT would be payable.

Note however, that if the employer is using the 50/50 split method of calculating FBT and deductions, the taxi travel would always be included in the cost of entertainment, and there would be no exempt journey for travel from the workplace to home.

Cristy Houghton

Embarketing, 48 Johnston Street, Wagga Wagga, NSW, 2650

Cristy's unique career has taken her from country NSW to the city lights of Clarendon Street South Melbourne and back again. With an early career in radio as a copywriter and creative strategist, she is now a Jill of all trades as a graphic designer, website builder, blog writer, video editor, social media manager, marketing strategist and more. 

In fact, give her any task and this chick will figure out how to do it! Go on, we dare you!

No, really, we DARE you!!

Cristy has won two Australian Commercial Radio Awards (ACRAs) for Best Ad and Best Sales Promotion, and even has an 'Employee of the Year' certificate with her name on it.

Cristy and her husband James have traveled extensively through Russia, China and South East Asia, and have two fur-babies, Sooty (cat) and Panda (puppy). Cristy loves drinking coffee, meeting people to drink coffee, coffee tasting and coffee flavoured cocktails. She also enjoys road trips, TED Talks and watching cat videos on youtube.