Published on Dec 4, 2018
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It’s that time of year, the silly season has officially started. So what things do you need to consider in regard to the Australian Tax Office (ATO) when you organise your work Christmas party?
There are probably two main areas an employer needs to concern themselves with; Fringe Benefits Tax (FBT) and tax deductibility.
What are the costs?
The FBT liability can vary depending on a number of factors, such as whether the party is held at the workplace or off-site, whether it is only for employees, or employees and their partners, plus associates and/or clients.
Here is a typical example which will apply to many local businesses.
|A small manufacturing company decides to have a party on its business premises on a working day before Christmas.
The company provides food, beer and wine.
* Where the benefits are indicated as qualifying for the minor benefits exemption, it is on the basis that the necessary conditions have been satisfied.
Generally, you won’t pay FBT if you host the Christmas party on your business premises, or keep the cost of the party to below $300 per person.
But you should check out the ATO website for more information on the tax implications.