December 22, 2018 Pat Mannix

Are Christmas Parties And Gifts Tax Deductible?

Pat Mannix

Pat Mannix

Partner
Pat Mannix champions small business people. Owning and running his own financial services firm for over 20 years, Pat is an expert in small business tax, property investors and high net worth families via trust structures and SMSF's.

It’s Christmas time and I come bearing gifts! No, it’s not gold, frankincense, and myrrh. It’s some tax information on what you can and can’t claim as an employer.

Many of you employers out there want to look after employees, and there’s nothing wrong with getting a little bit of a tax benefit at the same time.

Most queries I get are in relation to Christmas parties & Christmas gifts.

Christmas parties

We all love Christmas parties.

If you’re going to spend less than $300 per employee on your Christmas party (and I would think that would be most of us – if you’re spending more than $300 you’ve got a lot of spare cash to splash), there’s no fringe benefits tax.

You don’t have to report it, employers! No paperwork! No fringe benefits tax!

However, there’s no tax deduction for Christmas parties.

Christmas gifts to staff

You’ve gotta be careful with gifts.

You can’t claim a deduction for giving out things like footy tickets and concert tickets. But, gift cards and some other things are okay.

If it’s a gift card present and less than $300, it actually is tax deductible and there’s no fringe benefits tax. Happy days!

To sum it up

Christmas parties:

  • If less than $300 per employee, there’s no fringe benefit tax.
  • Can’t be claimed on tax.

Christmas gifts to staff:

  • If less than $300 per employee, there no fringe benefits tax.
  • If it’s an ATO approved gift, it is tax deductible.

Before you purchase or assume anything – make sure you check with your tax accountant exactly what you can and can’t claim. For further details, you can search the ATO website, or contact us on (03) 8393 1000.

Pat Mannix

Pat Mannix

Partner
Pat Mannix champions small business people. Owning and running his own financial services firm for over 20 years, Pat is an expert in small business tax, property investors and high net worth families via trust structures and SMSF's.

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