With Christmas coming up, it’s important to understand the ATO rules around parties and gifts so you don’t get caught with unexpected tax bills.
Here are the key things to remember:
Keep costs under $300 per person
If each benefit (party OR gift) is under $300, it may be FBT-exempt under the minor benefits rule.
Christmas Parties
• Off-site: Under $300 per head = likely FBT-free.
• On-site (during work hours): Usually FBT-free for employees.
• Costs for partners/guests may attract FBT if over $300.
Transport
• Taxi/transport to an off-site party counts toward the $300 limit.
• Taxi to an on-site party for employees is FBT-exempt.
Gifts for Employees
• Non-entertainment gifts (hampers, wine, gift cards) = tax deductible + GST credits.
• Entertainment gifts (movie, concert tickets) = not deductible and no GST credits.
Clients & Suppliers
• Christmas events for clients = not deductible (classed as entertainment).
• Gifts like wine, hampers, branded items = usually tax deductible.
• High-value tech or capital items = not deductible.
Good Record-Keeping Is a Must
Track: costs per person, gift values, event details & FBT calculations.
