#EveryoneNeedsAPlan: Employee Christmas Parties are Not Tax Deductible

Employee Christmas parties and gifts are subject to Fringe Benefits Tax ('FBT') and if exempt the cost is not tax deductible.

• The cost of the party may be exempt from FBT if only for your employees and held on the work premises during a working day
• If cost of the party may be also exempt from FBT if:
  • the party is held off the work premises
  • the party is not held on a working day
  • the party guests may include your employees' partners
  • the per-person cost of the party is under $300
• Employee gifts that cost under $300 per employee are also exempt from FBT
• However, if the cost of employee parties or gifts are exempt from FBT the employer cannot claim a tax deduction for the costs
• Here is link to the ATO web page that provides some examples which may help to clarify the tax treatment

If you're unsure about the tax treatment of your employee Christmas party or gifts, discuss with your Accountant or tax agent or Contact Us if you don't have tax professional to consult and we can refer you to one.