Christmas gift giving as a business owner

22 Dec 2022

Christmas is a time when the owners of a business often want to reward their employees by providing gifts to show appreciation for the year’s efforts.

Before deciding on gifts for employees you should consult your accountant or financial advisor to work out what type of gifts might best be made to avoid unintended tax consequences for the business owner and the employee.

There are different tax implications for gifts that are entertainment gifts and for gifts that cost more than $300 when compared to non-entertainment gifts and those costing less than $300. Entertainment gifts include things like tickets to sporting events or the theatre, or providing a paid vacation trip. A tax deduction to the business for entertainment gifts is not available. Furthermore, Fringe Benefits Tax (FBT) will be payable if the gift is worth more than $300.

Provided that non-entertainment gifts meet the minor benefits exemption they will be fully tax deductible with no FBT payable if they cost less than $300 per employee. Non-entertainment gifts are things like gift vouchers, hampers, wine and similar goods.

The minor benefits exemption will also apply to any gifts that are made to a spouse or partner of the staff member subject to the same restrictions on value and the type of gift provided.

The circumstances of individual businesses differ so, before deciding on any program of gift giving at Christmas or any other time, you should consult your accountant or financial advisor to make sure that your circumstances are taken into account before you proceed with gifts.

Please contact us on 9525 8688 or email and one of our professional team will be able to assist you by providing practical advice and assistance.


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