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FBT and Christmas Parties

It’s almost that time of the year! A reminder that while staff Christmas parties can attract fringe benefits tax (FBT) there may be exemptions available depending on the venue and cost per employee.

Two main exemptions to FBT could apply to Christmas parties - exempt property benefits and exempt minor benefits.

Exempt property benefits:

  • Light refreshments are exempt from FBT if they are provided on a working day, on business premises, and consumed by current employees of that business.

  • If the property benefits exemption doesn't apply the costs may be considered minor benefits and FBT exempt.

Exempt minor benefits:

  • cost per employee must be less than $300

  • the exemption also applies to associates of employees such as spouses and children, provided the cost is less than $300 per associate

  • gifts are also considered separately from the Christmas party so, provided the cost of a gift and the party are each less than $300, then both would be exempt from FBT.

Be aware that when the expenses are exempt from FBT they are not deductible for taxation purposes & GST should not be claimed.

Please contact one of the Sullivan Dewing accounting team if you require further information on FBT and Christmas.

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