The FBT of Christmas

The fringe benefits of Christmas

Christmas Fringe Benefits and Christmas in July

Christmas in July? or in December? Either way Christmas party planning is a regular past of business life and employers may be considering gifts for staff and their families. The key is to ensure that your Christmas cheer does not leave you with a FBT hangover.

Christmas Parties

The general position is that if a Christmas party is not held on your premises and the cost per employee is less than $300 per head ($150 per head if partners attend), it is classed as a minor benefit and no FBT is payable. The function is, however, classed as 'entertainment' and as such no GST or tax deduction will be claimable.

  • If the function is held on your premises on a work day for employees and it includes a light meal but no alcohol then no FBT is payable and GST and a tax deduction can be claimed.
  • If however, the function is held on your premises on a work day with the employees' families and alcohol is supplied (with the cost per employee being less than $300 per head), no FBT will be payable but no GST or tax deduction can be claimed either.
  • If this style of function exceeds a cost of $300 per employee then FBT is payable on the family portion and a tax deduction is claimable only for the portion for which FBT is payable.
  • Gifts to employees may be provided at the same time as the Christmas party without being included in the $300 minor benefit cost allowed for the party.
  • So long as the gifts are less than $300 and are not classified as 'entertainment' (Eg: Concert tickets) then no FBT is payable and GST and a tax deduction can be claimed on these items.

With this information in mind, you can enjoy a tax effective Christmas party season! - whenever that is for you.

Want to know more, ask your accountant or visit the ATO Minor Fringe Benefit exemption page here.


author pic drew browneDrew Browne is a specialty Financial Risk Advisor working with Small Business Owners & their Families, Dual Income Professional Couples, and diverse families. He's an award-winning writer, speaker, financial adviser and business strategy mentor. His business Sapience Financial Group is committed to using business solutions for good in the community. In 2015 he was certified as a B Corp., and in 2017 was recognised in the inaugural Australian National Businesses of Tomorrow Awards. Today he advises Small Business Owners and their families, on how to protect themselves, from their businesses.  He writes for successful Small Business Owners and Industry publications. You can read his Modern Small Business Leadership Blog here. You can connect with him on LinkedIn Any information provided is general advice only and we have not considered your personal circumstances. Before making any decision on the basis of this advice you should consider if the advice is appropriate for you based on your particular circumstance.

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