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What are the tax implications and benefits for my business if I pay for my employees’ gym memberships?

Many small to medium-sized business owners ponder the complexity of offering employee benefits such as gym memberships. Apart from keeping employees happy and motivated to work for the business, it can create certain tax liabilities that may be viewed as a benefit for your business. Offering gym memberships to your employees falls under the category of an Entertainment Fringe Benefit. If the annual cost of the gym membership exceeds the minor benefit exemption amount, which is $300 or more per employee, you will need to apply the Fringe Benefit Tax.

Tax Outcome 

  • Report Fringe Benefit in the FBT Return 
  • Report FBT in Employees PAYG payment Summary report. 

Tax Benefit

The business can claim:

  • An income tax deduction and GST credits for the cost of gym memberships 
  • An income tax deduction for the Fringe Benefit Tax (FBT) paid.