November 28, 2025
‘Tis the Season – But Don’t Forget FBT!
The festive season is here! For many businesses, that means planning Christmas parties, handing out gifts, and spreading good cheer among employees and clients. But before you pop the champagne, there’s one not-so-festive guest you need to keep in mind: Fringe Benefits Tax (FBT).
FBT can sneak up on businesses during the holidays, especially when celebrations involve perks for staff. The good news? With a little planning, you can keep the fun flowing without triggering an unexpected tax bill.
Why Does FBT Matter at Christmas?
Generally, FBT can apply when employers provide certain benefits to employees (or their associates) outside of salary or wages. Christmas parties and gifts often fall into this category. Whether FBT applies depends on factors like:
- Where the party is held – On-site parties during work hours are generally exempt.
- Who attends – Employees vs. clients makes a big difference.
- Cost per person – Gifts or entertainment over $300 per person (including GST) can attract FBT.
Key FBT Rules for Christmas Parties & Gifts
- On-premises parties during work hours: Usually exempt from FBT for employees.
- Off-site parties: May attract FBT unless the minor benefits exemption applies.
- Gifts under $300 per person: Typically exempt under the minor benefits rule.
- Gifts over $300 per person: Likely subject to FBT.
- Client entertainment: No FBT, but not tax-deductible.
Practical Tips to Minimise FBT
- Host the party on your premises during work hours – This is the simplest way to avoid FBT. But probably not the most festive option.
- Keep gifts modest – Staying under the $300 (including GST) threshold per person helps.
- Separate employee and client costs – Different rules apply, so track expenses carefully.
- Document everything – Good records make compliance easier and reduce risk.
Quick Compliance Checklist
- Is the party on-site and during work hours?
- Are gifts under $300 per person?
- Have you kept clear records of attendees and costs?
- Have you considered the minor benefits exemption?
Bottom line: A little planning now means you can celebrate without the sting of an FBT bill later. If you’re unsure, speak to us before the festivities kick off.
