Airport lounge memberships deductible
A recent tax determination has confirmed that the annual membership fee for airport lounges is deductible if the membership holder has an employment relationship with the bill payer.
As we are aware that your employees currently travel often for businesses purposes, you may want to provide them with this benefit, knowing that the provision of this membership is not only tax deductible but also exempt from fringe benefits tax.
The membership may also provide you, the business owner, with increased efficiency by using the workstations in the lounge when travelling during work hours.
If you have any questions then please feel free to contact ;
Martin van der Saag
Director
T: 02 9984 7774
E: martinv@nac.com.au
“A recent tax determination has confirmed that the annual membership fee for airport lounges is deductible if the membership holder has an employment relationship with the bill payer.”
About the author
Cayle Petritsch - Director & Wealth Advisor
Cayle Petritsch, Director and Wealth Advisor, works with our existing clients who have recognised the importance of business owners making strategic financial choices not only for their company, but for their personal finances too.
Cayle saw a great opportunity to expand North Advisory’s services into SMSF/superannuation, personal wealth management, asset protection services and other crucial personal finance facets that business owners need to consider.
His approach to wealth management allows you to receive highly personalised wealth advice. Working closely with Marius, Cayle understands the unique needs of every client, from their lifestyle and business goals to their retirement plans.
Key Takeaways
Airport lounge membership fees can be tax-deductible for employers when tied to business travel.
The annual membership cost is recognised as a business expense if it assists in earning assessable income.
A key condition is an employment relationship between the payer and the user.
Employers must provide the benefit to employees in connection with their work duties for the deduction to apply.
Fringe benefits tax may be exempt on these memberships.
When provided for genuine business travel purposes, the membership may not attract FBT, offering a further tax advantage to the employer.
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Frequently Asked Questions
Can a business claim a deduction for paying airport lounge membership fees?
Yes — an employer can claim a tax deduction for the annual fees of airport lounge memberships when the membership is provided in connection with an employment relationship.
Do lounge membership benefits attract fringe benefits tax (FBT)?
No — when provided as part of an employment benefit related to business travel, the airport lounge membership may be exempt from fringe benefits tax.
What qualifies the membership as deductible?
The fee must be incurred in the course of earning assessable income (for example, frequent business travel) and paid by the employer for the employee’s benefit.
Is the deduction limited by private use of the lounge?
In many cases, the deduction is still allowable even if the membership is also used for private travel by employees — provided the primary reason for the membership relates to earning assessable income.
What types of lounges does this apply to?
This can include memberships such as airline club lounges (e.g. Qantas Club or Virgin Australia lounge programmes) used by staff on business trips.
When is an airport lounge membership deductible?
The membership fee is deductible if the membership holder has an employment relationship with the entity paying the bill.
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