Many employers want to be able to show their staff their appreciation with gifts at Christmas, but there are a few laws you need to be aware of.

If the gift to employees and family members is under $300 and is for non-entertainment items, e.g. gift certificates and hampers, you are able to claim a tax deduction and the GST with no Fringe Benefits Tax (FBT) being payable.

For entertainment expenses such as movie tickets and is under $300, then for employees you cannot claim a tax or GST deduction and no FBT is payable. If over $300 then you can claim a tax deduction and FBT applies. If your entertainment gift is for clients then you cannot claim a tax or GST deduction, however, neither is FBT payable.

Christmas Parties

If you are not claiming FBT under the 50/50 rule, which is the most common method then the following rules apply. If the party is under $300 per head then no FBT is payable. However, you are unable to claim GST or the expense as a tax deduction. If over $300 per head, then FBT is payable however you are able to claim a tax deduction.

As you can see the rules that apply in the Christmas season can be over complex. If you have any questions when it comes time to claim these expenses feel free to contact our office on 07 5482 2855 to discuss your situation.