Navigating FBT on Staff Parties and Gifts
As the year draws to a close, many businesses begin planning ways to celebrate with their teams. Whether it is a staff lunch, a festive party, or a thoughtful gift, these gestures are a wonderful way to acknowledge the contribution of your people. They also offer a moment to pause, connect and appreciate the work you have done together. However, it is important to be aware that some of these celebrations and rewards may attract Fringe Benefits Tax (FBT).
Understanding When FBT May Apply
If you provide benefits such as food, drinks, entertainment, or gifts to employees, you may need to consider whether these are subject to FBT. The outcome depends on several factors, including how much is spent on each employee, the type of benefit provided, when and where the event is held, and who attends.
Even small gestures can be treated differently depending on the details, which is why a little clarity upfront can save confusion later.
Situations Where FBT May Not Apply
There are many occasions where end-of-year celebrations or gifts will not attract FBT. You may be exempt if:
A party or event is held away from the business premises and costs less than $300 per person, meeting the requirements of a minor benefit
Gifts given to employees are infrequent and valued at less than $300 per person
Recreational activities, such as a golf day, cost less than $300 per person and meet the minor benefit criteria
Benefits provided to clients rather than employees are not subject to FBT
These guidelines help you celebrate in a way that feels good for your team while staying on the right side of the rules.
Keeping Accurate Records
Good record-keeping is essential. It is important to note who attended events, what was provided, and the total cost per person. Retaining invoices and receipts will help ensure you can correctly determine any FBT liability and avoid unexpected penalties.
Keeping these details organised also gives you confidence in your decisions and makes future planning much easier.
Celebrating with Intention
At Accounting Heart, we believe recognition and connection are powerful parts of building a thriving business. Celebrations are about more than the event itself; they reflect your culture and values. With a little planning, you can honour your team’s hard work in a way that feels good for everyone and is tax-effective too.
If you are unsure how FBT may apply to your end-of-year celebrations or staff gifts, we are here to help you review the details so you can focus on what truly matters…celebrating your team and finishing the year well.
Disclaimer: This is general information only and is not advice of any sort. No warranty or representation is provided by Accounting Heart Pty Ltd as to the accuracy, currency or completeness of the information contained in this blog. Readers of this blog should not act or refrain from acting in reliance upon any information contained herein and must always obtain appropriate taxation and/or other advice as may be appropriate, having regard to their particular circumstances.