Employee Entertainment
<p>Use this category for Employee Entertainment - 
Be sure to create a line item in the general ledger for deductible & non deductible entertainment
 
Be sure to differentiate between travel expenses and entertainment. See Travel Expenses category.
 </p>
<h2 >14.16 Entertainment table</h2>
<p >The following table gives a simplified summary of the FBT and income tax results that generally arise from providing entertainment to employees and others. The table is not intended for use by income tax-exempt employers.</p>
<table ><tbody >
<tr >
<th >
<p >Situation</p>
</th>
<th >
<p >Income tax</p>
</th>
<th >
<p >FBT</p>
</th>
</tr>
<tr >
<td >
<p >Employee takes two clients to lunch at a restaurant - cost $150</p>
</td>
<td >
<p >Employee's portion<br />
$50 tax deductible
Client's portion<br />
$100 non-deductible</p>
</td>
<td >
<p >Employee's portion<br />
$50 fringe benefit
Client's portion<br />
No FBT</p>
</td>
</tr>
<tr >
<td >
<p >Employee has meal in restaurant while travelling on business trip</p>
</td>
<td >
<p >Tax deductible</p>
</td>
<td >
<p >No FBT ('otherwise deductible' rule)</p>
</td>
</tr>
<tr >
<td >
<p >Employee has meal in an 'in-house canteen'</p>
</td>
<td >
<p >Tax deductible</p>
</td>
<td >
<p >Exempt from FBT</p>
</td>
</tr>
<tr >
<td >
<p >Employer provides sandwiches and juice for working lunch in office (not entertainment)</p>
</td>
<td >
<p >Tax deductible</p>
</td>
<td >
<p >Exempt from FBT</p>
</td>
</tr>
<tr >
<td >
<p >Employer provides substantial lunch with wine for employees in office but not in 'canteen'</p>
</td>
<td >
<p >Non-deductible</p>
</td>
<td >
<p >Exempt from FBT</p>
</td>
</tr>
<tr >
<td >
<p >Employer provides social function for employees in office</p>
</td>
<td >
<p >Non-deductible</p>
</td>
<td >
<p >Exempt from FBT</p>
</td>
</tr>
<tr >
<td >
<p >Employer provides social function for employees and associates in office</p>
</td>
<td >
<p >Cost per employee<br />
Non-deductible
Cost per associate<br />
Tax deductible</p>
</td>
<td >
<p >Cost per employee<br />
Exempt benefit
Cost per associate<br />
Taxable fringe benefit</p>
</td>
</tr>
<tr >
<td >
<p >Employer reimburses employee for cost of private party</p>
</td>
<td >
<p >Amount reimbursed is tax deductible</p>
</td>
<td >
<p >Taxable fringe benefit</p>
</td>
</tr>
<tr >
<td >
<p >Employer provides employee and associates with theatre tickets</p>
</td>
<td >
<p >Tax deductible</p>
</td>
<td >
<p >Taxable fringe benefit</p>
</td>
</tr>
</tbody></table>
<p> </p>