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Christmas Parties, Gifts and Entertainment

The Christmas and holiday season is the ideal time for employers to reward their dedicated and hard-working staff for the year that was. It’s the time that many workplaces say goodbye to deadlines, meetings and late work nights and start winding down for the year. The traditional staff Christmas Party is popular, and some employers also like to give a special gift to say thank you.

So you might be asking, “is the work party and staff gifts tax deductible”? Well, yes,

these costs are tax deductible but only where the business is registered for and pays Fringe Benefits Tax (FBT) to the Australian Taxation Office (ATO) on the fringe benefits provided. There are, however, exemptions available to employers for certain fringe benefits associated with Christmas parties and staff gifts. If you are unsure of your obligations under the FBT laws, you should seek advice from your adviser. We have also included a link to the ATO’s guidelines for Fringe Benefits Tax and Christmas Parties to help you understand whether your party/gifts are tax deductible.

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