When an employer pays for an employee’s business trip accommodation, this benefit would be fully exempted from Fringe Tax Benefits (FBT) under the ‘Otherwise Deductible Rule’. Recently, the ATO had confirmed that when an employee’s spouse accompanies the employee on a business trip, the accommodation is still an exempted benefit provided that no extra cost had been incurred for the spouse.
For example, if the spouse pays for his/her own airfare and stays in the same hotel room with the working spouse paid by the company. This would not be considered as private use of accommodation and therefore no FBT liability will arise.
The ATO had also confirmed that where expenses are charged via the hotel bill, e.g. for the use of the room’s mini bar, that amount will be subjected to FBT but could be exempted under the minor and frequent benefits exemption.