Monthly tax tip:
Staff expenses and amenities are often a point of confusion for business owners when it comes to deductibility – so let’s look at what can actually be claimed and what is often accidentally claimed. Amenities for staff can include toiletries and hygiene expenses, water, food and drinks. These expenses are deductible but only to the extent that staff are using these items to continue their work activity. For example, toilet paper, handwash, tea, coffee and biscuits used by employees in an office throughout a working day are all deductible for the employer. Light refreshments can also be deductible if staff are eating them to continue work, e.g. snacks provided to staff for morning tea or sandwiches purchased in the evening for staff that are working overtime hours and continuing work after the meal has been eaten. If the food and drink is consumed outside of work hours when staff are no longer being paid then it is generally non-deductible and viewed as entertainment, e.g. drinks at the pub after work. This can be a very confusing area when working out the deductibility of expenses for staff and not only income tax needs to be considered but so too does fringe benefits tax and GST.
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