NEWSLETTER
FBT & Festive Cheer
As the year winds down, it’s time to celebrate achievements, show appreciation, and spread holiday joy. But before the festivities begin, let’s unwrap the tax implications of Christmas gifts and parties — so you can celebrate smart and stay compliant.
Christmas Gifts & FBT: What You Need to Know
Giving gifts to employees or clients? Here’s how FBT may apply:
Minor Benefits Exemption
Gifts under $300 (GST inclusive) per employee may be exempt from FBT if they’re infrequent and not part of a reward program.
Type of Gift Matters
Non-entertainment gifts (e.g. gift cards, wine, hampers) are generally tax-deductible and GST-creditable.
Entertainment gifts (e.g. concert tickets, holiday accommodation) may attract FBT and are usually not deductible.
Client Gifts
Gifts to clients are not subject to FBT and are typically tax-deductible.
Christmas Parties & FBT: Celebrate Smart
Hosting a party? Consider these FBT implications:
On-site parties during work hours may be exempt under the minor benefits rule.
Off-site parties or those involving associates (e.g. partners) may trigger FBT if costs exceed $300 per person.
Entertainment costs (food, drink, venue hire) are generally not tax-deductible unless FBT is paid.
Tips for a Tax-Smart Celebration
Keep detailed records of costs and attendees.
Separate entertainment from non-entertainment expenses.
Consider giving non-entertainment gifts to maximize tax benefits.
Wishing you a joyful, generous, and tax-savvy festive season!
For tailored advice, speak with your tax advisor or accountant.
PR Jennings Pty Ltd – Accountants Mornington - Ph 5975 5183
Disclaimer: All information provided in this article is of a general nature only and is not personal financial or investment advice. Also, changes in legislation may occur frequently. We recommend that our formal advice be obtained before acting on the basis of this information.
Please note we at PR Jennings Pty Ltd are not licensed to provide financial product advice under the Corporations Act 2001 (Cth)and taxation is only one of the matters that must be considered when making a decision on a financial product, including on whether to make superannuation contributions. You should consider taking advice from the holder of an Australian financial services licence before making a decision on a financial product.