If you're liable for Fringe Benefits Tax in respect of meals and entertainment for employees, you might be choosing to pay more than necessary. Software company Concur has released suggestions for keeping tabs on this. Obviously they're keen to see people use expense management tools like theirs, but some of the points are still worth keeping in mind.
These suggestions come from Concur https://www.concur.com.au , whose expense management software implements some of these ideas. You might know the company for its TripIt travel itinerary service http://www.bit.com.au/News/372935,is-it-worth-using-the-free-tripit-app-for-keeping-track-of-your-travel-papers.aspx .
1. Automate the expense management process. Automating the process lets SMBs determine the lowest FBT liability automatically. It provides full visibility into expenses and enforces the travel and entertainment policy to optimise the expense management process. It also saves employees time.
2. Use clear descriptive definitions for meal and entertainment expenses. Over-complicating it will confuse employees and impact the quality of data from both a calculation and compliance perspective.
3. Train employees. Ensure employees understand the difference between the travelling and non-travelling employee status as this affects the FBT liability.
4. Use an employee master list to ensure data accuracy. Make it simple to search for employee data and avoid multiple versions of the same data.
5. Review the FBT reporting method annually. Don’t assume a specific calculation method will always equate to the lowest FBT liability. For example, leverage technology to establish benchmark testing annually against a 50/50 calculation.