FBT reasonable food and drink amounts
Taxation Determination TD 2019/7 sets out the amounts that the Commissioner considers reasonable under s31G of the Fringe Benefits Tax Assessment Act 1986 for food and drink expenses incurred by employees receiving a living-away-from-home allowance (LAFHA) fringe benefit for the FBT year commencing on 1 April 2019.
“Where the total of food and drink expenses for an employee (including eligible family members) does not exceed the amount the Commissioner considers reasonable, those expenses do not have to be substantiated under s 31G.”
Where the total of food and drink expenses for an employee (including eligible family members) does not exceed the amount the Commissioner considers reasonable, those expenses do not have to be substantiated under s31G.
If an employer wants to reduce the taxable value of an employee’s LAFHA fringe benefit by the exempt food component, the expenses must be either:
- equal to or less than the amount the Commissioner considers reasonable under s31G(1)(b), or
- substantiated in accordance with s31G(2).
If the total of an employee’s food or drink expenses exceeds the amount the Commissioner considers reasonable, the substantiation provisions under s31G will apply.
Reasonable amount for food and drink — in Australia
Table 1 below sets out the weekly amounts the Commissioner considers to be reasonable food and drink amounts for a LAFHA paid to employees living-away-from-home within Australia for the FBT year commencing on 1 April 2018. These amounts are for the total of food or drink expenses and include any amounts that may have been allowed for home consumption.
|
|
Per week ($) |
|
One adult |
269 |
|
Two adults |
404 |
|
Three adults |
539 |
|
One adult and one child |
337 |
|
Two adults and one child |
472 |
|
Two adults and two children |
540 |
|
Two adults and three children |
608 |
|
Three adults and one child |
607 |
|
Three adults and two children |
675 |
|
Four adults |
674 |
Note: “Adults” for this purpose are persons who had attained the age of 12 years before the beginning of the FBT year.
In relation to larger family groupings, the Commissioner accepts the reasonable food and drink amount based on the above figures plus $135 for each additional adult and $68 for each additional child.
“If the total of an employee’s food or drink expenses exceeds the amount the Commissioner considers reasonable, the substantiation provisions under s 31G will apply.”
Reasonable food and drink amounts — overseas
Tables 2 to 4 of TD 2019/7 set out the weekly amounts the Commissioner considers to be reasonable food and drink amounts for a LAFHA paid to employees living-away-from-home outside Australia for the FBT year commencing on 1 April 2019.
Table 2 sets out the cost group to which a country has been allocated. Please refer to TD 2019/7 for Table 2.
Table 3 sets out the reasonable amount for food and drink expenses for each cost group. If the employee lives away from home in a country that is not shown in Table 2, the employee can use the amount for cost group 1 in Table 3.
|
Cost Group |
Food and drink for one adult |
|
1 |
$137 |
|
2 |
$201 |
|
3 |
$273 |
|
4 |
$328 |
|
5 |
$437 |
|
6 |
$537 |
Where the employee is accompanied by other family members while overseas, the reasonable food and drink amount per week for the family is worked out by multiplying the amount shown in Table 3 by the relevant factor in Table 4 below.
|
Family group |
Factor |
|
Two adults |
1.5 |
|
Three adults |
2.0 |
|
One adult and one child |
1.25 |
|
Two adults and one child |
1.75 |
|
Two adults and two children |
2 |
|
Two adults and three children |
2.25 |
|
Three adults and one child |
2.25 |
|
Three adults and two children |
2.5 |
|
Four adults |
2.5 |
In relation to larger family groups, the Commissioner accepts the reasonable food and drink amounts can be increased:
- for each additional adult, by a further 50% of the relevant single adult rate in Table 3, and
- for each additional child, by a further 25% of the relevant single adult rate in Table 3.
If you have any questions about claiming reasonable amounts for food and drink expenses as a tax deduction, please do not hesitate to contact us.
Norman Ruan
Accountant
T: 02 9984 7774
E: normanr@northadvisory.com.au
About the author
Marius Fourie - Director & Business Advisor
As Director and Business Advisor, Marius uses his accounting expertise and empathetic skills to work directly with business owners and help them feel at ease with their finances.
Marius saw a common need in clients that just wasn’t being met by accounting providers.
That need was for clear, open communication and streamlined accounting services that didn’t come padded out with any unnecessary features.
Business owners just don’t have time to compare different accounting firms to see which one has the best packages with the best inclusions (many of which they would pay for but never use).
Key Takeaways
Reasonable-amount thresholds simplify compliance for many employers and employees —
as long as food and drink expenses remain within the benchmark, there’s no need to keep copies of every receipt.
Thresholds depend on household composition —
number of adults and children must be considered when calculating the weekly reasonable food/drink allowance under LAFHA.
The rule applies both domestically and overseas —
meaning expatriate or seconded staff living away from home abroad can also rely on the allowances so long as they use the appropriate overseas threshold tables.
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Frequently Asked Questions
What are “reasonable food and drink amounts” under FBT?
These are statutory thresholds set by the tax authorities (via public rulings such as the relevant Taxation Determination) that define how much in food and drink expenses is considered reasonable for employees receiving a living-away-from-home allowance (LAFHA). If expenses stay within those thresholds, no detailed receipts or further proof is required.
When does an employer or employee need to substantiate food and drink expenses?
Substantiation is required only when total food and drink expenses exceed the “reasonable amount.” Otherwise, staying within the threshold means the amounts can be accepted without further evidence.
Do these reasonable-amount thresholds vary depending on family size?
Yes. The threshold depends on the number of adults and children covered by the LAFHA. For example, different weekly amounts apply for a single adult, two adults, or a couple with children, etc.
Does the rule apply only within Australia, or also overseas if living away from home abroad?
It applies both within Australia and overseas. Separate “reasonable amount” tables apply depending on the location — whether the employee is living away from home in Australia or overseas under assignment.
What happens if expense amounts go over the reasonable threshold and aren’t substantiated?
If costs exceed the threshold and are not properly substantiated under the law, the excess food and drink component of the LAFHA may become taxable — potentially increasing the fringe-benefit tax liability.
What are “reasonable food and drink amounts” for FBT purposes, and how do they affect my business?
“Reasonable food and drink amounts” are deemed fringe benefits that can be treated as non-FBT benefits if the value per employee per meal or drink falls within the ATO’s set thresholds. If I provide meals or drinks (like morning tea or staff lunches) and the value stays under those reasonable amounts, I may avoid paying Fringe Benefits Tax (FBT) on them — helping reduce my overall FBT liability without needing complex valuation methods.
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