The holiday season is a time to celebrate with friends, family, and colleagues—but as your advisor, we want to ensure you’re aware of the potential tax implications when hosting end-of-year events for your employees. Here’s what you need to know:

Christmas Parties

On-Premises Events:

• Employees Only: No Fringe Benefits Tax (FBT) applies, but you also can’t claim a tax deduction or GST credits.
• Employees + Associates/Clients:
  • Under $300 per head: No FBT, no tax deduction, and no GST credits.
  • Over $300 per head: FBT applies to employee associates’ costs, but you can claim a tax deduction and GST credits on those amounts. Other costs remain non-deductible.

Off-Premises Events:

• Under $300 per head: No FBT, no deduction, and no GST credits.
• Over $300 per head: FBT applies for employees and their associates, making these costs deductible with claimable GST credits. Costs related to clients are non-deductible.
• Gifts at the Party: If guests receive non-entertainment gifts (like hampers) worth under $300, these are tax-deductible, and GST credits apply—separate from the party costs.

Christmas Gifts

Non-entertainment gifts under $300—like hampers, wine, gift vouchers, or flowers—are exempt from FBT and fully tax-deductible.

Need clarification on your holiday expenses? Reach out to us at HKS Russell, and we’ll ensure your festive cheer doesn’t lead to unexpected tax surprises!

e: advisors@hksrussell.com
t: +61 7 3177 4120

Posted on November 25, 2024 by Charisse Russell - Articles