Planning a Christmas party for your staff? What does the FBT Minor Benefits Exemption mean to you?
The Christmas season is upon us all once again and in many organisations, the staff Christmas party is a hot topic of discussion in the workplace. Many employers are wanting to treat staff to a work Christmas party and possibly a gift or two. Are these expenses tax deductible? Are these expenses considered a Fringe Benefit? If so, do I now have to lodge a Fringe Benefits tax return & pay Fringe Benefits Tax? What about the GST? We are here to answer your questions by delving into the murky waters.
Is the cost of a Christmas party a Fringe Benefit?
In short - Yes. But depending on the cost per employee, it can be included under the FBT Minor Benefit Exemptions.
Is the Christmas party tax deductible?
No. A staff party is considered entertainment. Basically any event where alcohol can be served, regardless of whether or not it is, is not tax deductible. (are you thinking about your Melbourne Cup expenses too now?)
Can I claim GST on my Christmas party expenses?
No. If the expense is not tax deductible, you cannot claim GST either.
Is a Staff Gift a Fringe Benefit?
In short - Yes. But depending on the cost and nature of the gift, it can be included under the FBT exemptions.
Is the cost of a Staff Gift tax deductible?
Yes. Provided it is a non-entertainment based gift and is less than $300 (inclusive of GST) per employee.
Can I claim GST on my staff gift?
Yes. Provided it is a non-entertainment based gift and is less than $300 (inclusive of GST) per employee.
Is there anything else I need to know about providing benefits to my Staff and FBT?
Yes. FBT and staff benefits can be very murky waters. The expertise of your tax agent in these situations is invaluable.
More information
To discuss any of the above further, you can ring our office on 4021 2801.
'' The greatest asset of a company is its people" - Jorge Paulo Lemann, cofounder of Banco Garantia