Gift Card Express

Fringe Benefits Tax and Corporate Gifts

Avoid tax and keep staff gifts under $300 per person


Ever wondered how much you can spend on your team before you get hit with Fringe Benefits Tax (FBT)?

The answers are clear according to the Australian Tax Office (ATO).

Put simply and we quote the ATO “there is no separate fringe benefits tax (FBT) category for Christmas parties, and you may encounter many different circumstances when providing these events to your staff. Fringe benefits provided by you, an associate, or under an arrangement with a third party to any current employees, past and future employees and their associates (spouses and children), may attract FBT.”

So what does this mean?

Basically, the costs (such as food and drink) associated with Christmas parties are exempt from FBT if they are provided on a working day on your business premises and consumed by current employees.

When it comes to gifts

The ATO considers a Corporate Christmas gift to an employee as a minor benefit that is an exempt benefit if you keep the value under $300.

Where it becomes a bit tricky is where you give a Christmas Gift at the Christmas party which is also provided by you the employer. Here according to the ATO “the benefits are associated benefits, but each benefit needs to be considered separately to determine if they are less than $300 in value. If both the Christmas party and the gift are less than $300 in value and the other conditions of a minor benefit are met, they will both be exempt benefits.”

Bottom line keep the per person limit under $300.

Your accounting team should be well across this – however if you are a small enterprise best check with the ATO and your accountant.