As someone who uses Salary Packaging Meal Entertainment, I can tell you that this benefit is a powerful tool for optimizing your dining out expenses. If you’re like me and enjoy a good meal at a restaurant occasionally but don’t want to feel obligated to do so frequently, this benefit can be ideal for you.
What is Salary Packaging Meal Entertainment?
Meal Entertainment is a program that allows you to use part of your packaged salary to cover expenses on meals and entertainment at eligible restaurants and venues. This benefit is designed to help reduce the impact of your dining out expenses by offering you tax relief. Essentially, you can use up to $2,650 per year tax-free to pay for your meals at eligible places.
What Can I Salary Package Under Meal Entertainment?
Under the Meal Entertainment benefit, you can salary package the following:
- Dining Out: Expenses incurred while dining at restaurants, cafés, clubs, pubs, or fast food establishments with your family or friends.
- Professional Catering: Costs associated with hiring professional caterers to prepare and serve food and drinks for a party or event.
- Special Events: Meals and refreshments at balls, gala events, or charity dinners.
How I Use My Meal Entertainment Benefit
Personally, I make a salary sacrifice of around $150 per month for meals, which totals $1,800 per year. Although the limit is $2,650, we don’t reach the maximum because we don’t dine out that often. In our experience, this amount is sufficient to cover our restaurant outings without feeling pressured to eat out more frequently than we’d like.
In Australia, the food at some places can be quite salty, so we prefer to cook at home most of the time. Using Meal Entertainment allows us to enjoy a nice meal at a restaurant without the stress of reaching the total limit, which is not always necessary for our lifestyle.
Benefits and Limitations of Meal Entertainment
| PROS | CONS |
|---|---|
| Tax Savings: Reduces taxable income, resulting in significant tax savings. | Limited to Sit-Down Meals: The benefit is only for dine-in meals, not for quick snacks or takeout. |
| Flexibility: Can be used for meals at restaurants and venues, as long it’s a dine-in, all are covered. | Usage Pressure: Trying to reach the maximum limit may pressure you to dine out more frequently than desired. |
| Convenience: Convenient to use by simply presenting your bills at your salary packaging provider or by requesting a Meal Entertainment Card, where your tax-free funds are automatically applied. | Groceries Are Not Included: The benefit applies only to dining out and does not cover groceries or food purchased for home consumption. |
How to Make the Most of It
To get the most out of Meal Entertainment, I recommend planning your restaurant and venue outings in a way that fits your budget without forcing yourself to spend more than necessary. Take advantage of the benefit to enjoy a nice meal when you truly want to and avoid feeling obligated to use it just to reach the limit.
Important Note: The $2,650 per year tax-free is not included in the maximum amount you can save of $15,900. In other words, in addition to the $15,900 (if you work for a non-profit or charitable employer), you can save an extra $2,650 tax-free.
You can achieve a total of $18,550 in tax-free savings if you maximize all available benefits.
Conclusion
Meal Entertainment is an excellent tool for those looking to optimize their dining out expenses while enjoying tax benefits. With proper planning and mindful use, you can enjoy meals at restaurants without worrying about spending more than necessary or feeling obligated to do so frequently.
If you’re considering using this benefit, evaluate your eating habits and choose an amount that fits your lifestyle. This way, you can enjoy the tax advantages without compromising the quality of your meals.
Frequently Asked Questions about Salary Packaging Meal Entertainment
The meal entertainment benefit allows you to use pre-tax income to cover expenses for meals and drinks at a wide range of places, including restaurants, cafes, clubs, pubs, and fast-food outlets. Additionally, this benefit extends to events that require professional catering services, such as parties, galas, charity events, and corporate dinners.
No, the meal entertainment benefit has a separate limit of $2,650 per fiscal year (from April 1 to March 31) and does not count within the tax-free daily expenses limit. Eligibility for this benefit may depend on your sector and employer.
No, the $2,650 limit does not carry over to the next fiscal year. It is recommended to use the full limit each fiscal year to maximize your benefits and avoid losing any unused amount.
No, the meal entertainment benefit only covers meals consumed on-site (dine-in). Take-away meals are not eligible for this type of salary packaging.
If you have a salary packaging and meal entertainment card, you can track your expenses using the SmartSalary app or by accessing your online account. For manual claims, check your most recent balance by logging into your online account to make a claim.
Yes, you can use the meal entertainment benefit for charity dinners, as long as they involve a meal and do not involve take-away food or snacks.