xmas gift tax

Tax on xmas gifts

Anita van Wyk Tax

Everyone loves a good work Christmas party, but not all of your expenses may be tax deductible and potentially may also be at risk of Fringe Benefits Tax.
Provided your work Christmas party is on premises during a working day, or offsite and a minor benefit (less than $300 per person) there will be:

  • No FBT
  • Not Tax Deductible
  • No GST Credit Claimable

If your work Christmas party is offsite but not a minor benefit (that is greater than $300 per person) there is a risk that there may be FBT payable on the benefit provided to employees or their associates. Where FBT is payable, the party expenses are tax deductible and GST credit is claimable. There won’t be any FBT for clients who attend, and the client’s benefits will also be not tax deductible.

Along with Christmas parties, many employers will also provide staff and clients with gifts. These rules can be a bit more complicated.

Staff and client gifts rules


  • A gift of entertainment to a client has no FBT, not tax deductible and no GST credit claimable
  • A gift to a client that is NOT entertainment has no FBT, is tax deductible and business is entitled to GST credit claimable
  • A gift of entertainment to a staff member that is a minor benefit has no FBT, not tax deductible and no GST credit claimable
  • A gift of entertainment to a staff member that is NOT a minor benefit may have FBT payable, tax deductible and GST credit claimable
  • A gift to a staff member that is NOT entertainment, but a minor benefit has no FBT, is tax deductible and can claim GST credit
  • A gift to a staff member that is NOT entertainment and NOT a minor benefit may have FBT payable, tax deductible and GST credit claimable

If you are unsure as to the tax treatment of your Christmas expenses please contact us.