Your office Christmas party: can you claim the expense on tax?

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Your office Christmas party: can you claim the expense on tax?

One tax consultant argues that giving your workers gifts instead of a Christmas party is a more tax efficient way of doing things.

Here's a fascinating explanation of the tax dos and don'ts when it comes to hosting your office Christmas party this year.

According to the article, in Australia it's actually better tax-wise to give your staff "non-entertainment gifts" like flowers, wine and gift vouchers, instead of spending the money on a Christmas party.

No doubt it's financially prudent advice, though we wonder if ditching the office Christmas party is good for staff morale.

The article comes from chartered accountant Joe Kaleb, who runs the site and appears in various media outlets commenting on business tax matters. We recommend you take a look at the entire article at the site.

The article itself notes a number of interesting tax rules. For example:

  • Christmas parties can be subject to fringe benefits tax, except in certain situations where the cost per head is less than $300.
  • Having the work Christmas party in the office on a work day, with no alcohol, and there's no family or friends invited, then the entire affair is tax deductible, and there's no FBT, according to Kaleb.
  • But if family comes to the party, they're apparently counted when calculating the cost per head $300 threshold, so this might benefit you in terms of FBT.
  • "Non-entertainment" gifts are FBT exempt, like flowers and wine, if they're less than $300 and you might be able to claim a tax deduction. Although the alcohol needs to be drunk at home, not at work.

There are all sort of other tips, even taxi rides to and from the Christmas party are covered.

Of course, we'd advise you to check all of this carefully with your own tax advisor.

Additionally, the Australian Taxation Office has this page about fringe benefits and Christmas parties.

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