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Australia Tourism & Hospitality Tax Guide

Australian tax rules for the tourism and hospitality industry. The guide covers: the GST on the accommodation — the 'tourist accommodation' (the 'hotel accommodation', the 'motel accommodation', the 'short-stay rental' (the 'Airbnb' and the 'Stayz'), and the 'serviced apartments') is subject to the 'GST' at the rate of 10% (the 'GST on the commercial accommodation'); the 'GST' applies to the 'supply of the commercial accommodation' under the 'GST Act 1999' — the 'GST-inclusive price' for the 'hotel rooms', the 'motel rooms', and the 'short-stay rentals' must include the 'GST'; the 'short-stay rental operators' (the 'hosts' on the 'Airbnb' and the 'Stayz') must register for the 'GST' if the 'GST turnover' is $75,000 or more (the 'GST registration threshold'); the 'short-stay rental hosts' may use the 'GST margin scheme' for the 'property that was acquired before the 1 July 2000' (the 'GST margin scheme' for the 'pre-GST properties'); the restaurant and cafe taxation — the 'restaurants', the 'cafes', and the 'takeaway food outlets' are subject to the 'GST at 10%' on the 'supply of the food and the beverages' (the 'GST on the restaurant meals' and the 'takeaway food'); the 'GST-free food' (the 'basic food' — the 'unprocessed food', the 'milk', the 'bread', the 'eggs', the 'vegetables') is NOT subject to the 'GST' when sold in the 'supermarkets' and the 'grocery stores' — but the 'restaurant meals' and the 'cafe meals' are 'GST-supplies' (the 'GST applies to the 'meals' and the 'beverages' supplied in the 'restaurants' and the 'cafes', regardless of the 'food type'); the 'restaurant' and the 'cafe' operators must lodge the 'BAS' (the 'Business Activity Statement') monthly or quarterly (the 'GST reporting' through the 'BAS'); the FBT on the hospitality staff — the 'hospitality employers' (the 'hotels', the 'restaurants', the 'cafes', the 'bars', the 'clubs') may provide the 'fringe benefits' to the 'employees' — the 'meal entertainment' (the 'staff meals' and the 'free drinks'), the 'accommodation' (the 'staff accommodation'), and the 'transport' (the 'staff shuttle'); the 'meal entertainment' may be subject to the 'FBT' at the rate of 47% (the 'FBT rate'); the 'minor benefit exemption' (the '$300 minor benefit exemption) may apply to the 'staff meals' if the 'value' is less than $300 per 'employee' per 'event'; the 'staff accommodation' (the 'living-away-from-home accommodation' and the 'residential accommodation') may be subject to the 'FBT' (the 'housing fringe benefit' and the 'living-away-from-home allowance (the 'LAFHA')'); the PAYG withholding and the payroll tax for the 'hospitality employers' — the 'hospitality employers' must withhold the 'PAYG' (the 'Pay As You Go' withholding) from the 'employee wages' (the 'salary', the 'wages', the 'tip income', and the 'service charge'); the 'tips' (the 'cash tips' and the 'tips paid through the 'EFTPOS' and the 'credit card') are the 'assessable income' for the 'employees' and the 'PAYG' must be withheld (the 'tips' through the 'EFTPOS' and the 'credit card' are the 'wages' for the 'PAYG' purposes); the 'hospitality employers' must pay the 'payroll tax' if the 'total wages' exceed the 'payroll tax threshold' (the 'thresholds vary by the state' — from $1 million to $2 million; the 'payroll tax rate' is 4% to 6.85% by the 'state').

GST on Accommodation

  • GST at 10%: The 'commercial accommodation' (the 'hotel rooms', the 'motel rooms', the 'short-stay rentals') is subject to the 'GST at 10%'. The 'GST turnover' for the 'short-stay rental hosts' must exceed $75,000 to require the 'GST registration'.
  • Short-stay rental: The 'Airbnb' and the 'Stayz' hosts must register for the 'GST' if the 'GST turnover' is $75,000 or more. The 'GST' must be included in the 'listing price'. The 'host' can claim the 'input tax credits' on the 'expenses' (the 'cleaning', the 'management fees', the 'utilities', the 'maintenance').
  • GST margin scheme: The 'margin scheme' may apply to the 'property acquired before the 1 July 2000'. The 'GST margin' is calculated as the 'difference between the sale price and the acquisition price'.

For the GST registration and the BAS lodgement, see our GST Guide →.

Restaurant & Cafe Taxation

  • GST on meals: The 'restaurant meals' and the 'cafe meals' are subject to the 'GST at 10%'. The 'basic food' (the 'GST-free food') is 'GST-free' when sold in the 'supermarkets' but the 'restaurant meals' are 'GST-supplies'.
  • BAS lodgement: The 'restaurant' and the 'cafe' operators must lodge the 'BAS' (the 'Business Activity Statement') monthly or quarterly. The 'BAS' reports the 'GST collected', the 'GST paid', and the 'PAYG withholding'.
  • Tips and service charges: The 'tips' (the 'EFTPOS tips' and the 'credit card tips') are the 'assessable income' for the 'employees'. The 'PAYG' must be withheld from the 'tips'. The 'tips' paid through the 'EFTPOS' are subject to the 'PAYG withholding'.

For the PAYG withholding and the employer obligations, see our Hiring Employees Guide →.

FBT & Payroll Tax

  • FBT on staff meals: The 'meal entertainment' (the 'staff meals' and the 'free drinks') may be subject to the 'FBT at 47%'. The 'minor benefit exemption' ($300 threshold) may apply if the 'value' is less than $300 per 'employee' per 'event'.
  • FBT on staff accommodation: The 'staff accommodation' (the 'on-site accommodation' and the 'subsidised accommodation') is the 'housing fringe benefit'. The 'taxable value' is the 'market value of the accommodation' minus the 'rent paid by the employee'.
  • Payroll tax: The 'hospitality employers' must pay the 'payroll tax' if the 'total wages' exceed the 'state threshold' ($1 million to $2 million by the 'state'). The 'payroll tax rate' is 4% to 6.85%. The 'wages' include the 'salary', the 'wages', the 'tips', the 'superannuation', and the 'fringe benefits'.

For the FBT exemptions and the otherwise deductible rule, see our Fringe Benefits Tax Guide →.