Insight

Takeaway meals now included in NFP salary packaging

Elizabeth Lucas Elizabeth Lucas

Many not-for-profit employers offer salary packaging of meal entertainment to employees, such as health care workers, within an annual capped amount.

Traditionally, only dine-in meals, and not takeaway, have been permitted, basically as takeaway meals were less likely to constitute entertainment.

This was not a legal requirement, but a practical measure to keep things simple. With the recent closure of restaurants for dine-in options, it has become almost impossible for employees to access meal entertainment salary packaging in the traditional way. This presented a major problem for many health care workers and employees of other not-for-profit organisations, who were effectively unable to access about $2,500 of their annual remuneration.

As a result of Grant Thornton presenting this problem and a proposed solution to the Australian Taxation Office (ATO), the ATO has now issued guidance stating they will not review meal entertainment salary packaging arrangements: - in the 2020 FBT year, during the period when restaurants and public venues were closed; nor - in the 2021 FBT year where the supplier of the meal was an eligible supplier as at 1 March 2020 (this effectively means that the supplier had a dine-in option in 2020).

This means that for 2021, employees can use their meal entertainment salary packaging cap on takeaway meals, provided the supplier previously had a dine-in option. This includes purchases from those suppliers through delivery companies.

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