FBT ‘ Ticket to ride!

Across our face-to-face training, online training and Q&As, we have noticed an increasing query rate in regards to the issue of staff being provided with tickets to various events. An example of this could include a local Council sponsoring a concert where the Council is provided with complimentary tickets by the organisers of the event.

If these complimentary tickets are allocated to staff members, on the face of it a FBT liability would appear to arise. But is this always the case?

What benefit category does a ticket fall within?

A ticket entitling the bearer to attend a concert, movie or other function will generally be considered the provision of recreation and therefore entertainment. For tax-exempt bodies, the provision of entertainment has its own specific category – tax-exempt body entertainment fringe benefit (TEBEFB).

A TEBEFB arises where the provider incurs non-deductible exempt entertainment expenditure in providing entertainment to a person that is an employee or associate of an employee in respect of the employee’s employment.

In determining the taxable value of a TEBEFB, it is so much of the non-deductible exempt entertainment expenditure incurred by the provider as is attributable to the provision of entertainment to the employee or associate concerned. In other words, it is essentially based on the amount of actual expenditure incurred by the provider in providing the benefit.

If we revert back to our earlier example of a Council being provided with complimentary tickets which it, in turn, allocates the staff, the critical questions to ask are:

  1. Who is the provider of the benefit?
  2. What expenditure did the provider incur in relation to providing the benefit?

The tickets in our example have been given to the Council and, as such, become the property of the Council. When allocated to staff members, it is our view the Council is providing the tickets and is therefore the provider for TEBEFB purposes.

In regards to the second question, as the tickets were given to the Council, the Council has incurred no direct expenditure in acquiring the tickets.

Based on the answers to the above two questions we are of the view that no TEBEFB arises as no expenditure has been incurred by the Council in respect of non-deductible exempt entertainment expenditure.

It would therefore appear reasonable to conclude that the provision of the ticket constitutes either a property or residual fringe benefit.

Tickets as Property or Residual Fringe Benefits

Does a fringe benefit liability arise if the tickets are not used by the employee and/or their associate?

If the tickets are not used, a fringe benefit has not been provided, as the recipient of the ticket has not benefited from the entitlement to which the ticket relates.

Does a fringe benefit liability arise if the tickets are used by the employee and/or their associate?

If the tickets are used by the employee then a benefit is provided in the form of recreation (i.e. access to and attendance at the event).

Although the provision of  recreation falls within the definition of entertainment, on the basis the provision of the tickets does not constitute a TEBEFB, then depending on the cost of the ticket and the frequency/regularity with which they are provided to staff, access to the minor benefit exemption is available.


Income tax-exempt employers should not automatically assume that a TEBEFB arises where a staff member is given tickets that the employer has obtained without direct expenditure.

It is recommended that employers keep a register of the provision and use of tickets by employees as this will provide a basis for determining whether access to the minor benefit exemption is available.

Of course tickets provided to clients, suppliers, or others who are not employees or associates of employees will not have any FBT repercussions.

In the absence of ATO materials dealing with the key point discussed above, we are in the process of obtaining a non-binding ATO opinion. We intend to revisit the matter on receipt of the ATO’s opinion.

This article provides a general summary of the subject covered and cannot be relied upon in relation to any specific instance. It is not intended to be, nor should it be relied upon as, a substitute for professional advice. TaxEd Pty Ltd and any person connected with its production disclaim any liability in connection with any use.