As the end of year approaches, many businesses celebrate with staff parties, events and gifts to recognise and reward their employees.
If you're planning an end-of-year workplace celebration, you should consider if the benefits you provide attract fringe benefits tax (FBT).
This will depend on:
- the amount you spend on each employee
- when and where your event is held
- who attends the event
- the value and type of gifts provided.
When FBT may not apply
If your business holds a workplace celebration or provides staff with gifts, these may be exempt from FBT in some situations. This can include when you provide:
- food and drink to your employees that is consumed on your business premises on a working day
- food and drink to your employees or associates (such as partners) off your business premises which costs less than $300 per person and qualifies as a minor benefit
- infrequent gifts to your employees with a value of less than $300 per person and qualifies as a minor benefit
- recreational activities (such as golf) which cost less than $300 per person and qualify as a minor benefit
- benefits to your business clients, as they are not subject to FBT.
Check our common entertainment fringe benefit examples to see if they apply to your situation.
Make sure to keep the right records to stay compliant and avoid unexpected penalties.
Learn more about How to work out FBT on entertainment or seek advice from a registered tax agent.
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