Top tips to save you Fringe Benefits Tax this festive season

Coming into this festive season, many people are planning their end of year parities and client gifts. Whilst it is the time for celebration, planning ahead can lead to some always welcome tax savings.

Along with some helpful guidance around FBT, here’s our top tips to save you FBT this festive season.

What is FBT?

Fringe Benefits Tax (FBT) applies where an employer provides a non-cash benefit to an employee other than by way of their regular salary or wage.

At first instance a Christmas party could be considered such a benefit and FBT could more than double the cost of the celebrations. However planning the circumstances of your Christmas party could result in an FBT exemption for your celebrations, particularly where the per head costs are kept below $300.

Our top tips for limiting your FBT exposure

  • Use the actual method to calculate FBT on entertainment fringe benefits.
  • Keep the cost of the Christmas party to less than $300 per head.
  • Check that gifts provided to staff are less than $300 in value (incl. GST).
  • Provide non-entertainment gifts such as wine or chocolates to clients to ensure a tax deduction is available.
  • Further guidance

    As always, we’ve compiled a few common scenarios to help you understand the FBT implications of each.