FBT and Festive Season Expenses: What Employers Need to Know

While it’s a great way to celebrate the year and thank your team, some costs may trigger Fringe Benefits Tax (FBT) — and many employers aren’t aware until it's too late. 

Understanding the rules now can help you stay compliant and avoid unexpected tax bills. 

When FBT May Not Apply 

Some expenses can be exempt — especially under the minor benefits rule (under $300 per person, per benefit). 

FBT generally does not apply when: 

• Food and drinks are provided on your business premises on a working day 
• A staff celebration off-site costs under $300 per person 
• Gifts are infrequent and less than $300 each 
• Recreational activities (like bowling, mini golf or team experiences) are under $300 per person 
• Benefits are provided to clients (not employees) 

Remember: The $300 rule applies per person, per benefit — and doesn’t automatically mean exemption. 

When FBT May Apply 

FBT is likely to apply if: 

• The cost per employee exceeds $300 
• Gifts are frequent or high-value 
• Partners or family members attend and exceed the minor benefit threshold 
• The benefit doesn’t qualify as minor, infrequent or exempt entertainment 

If applicable, you may also need to: 

• Report fringe benefits through STP 
• Keep detailed supporting evidence 
• Pay FBT when required 

Why Keeping Records Matters 

Even if an expense is exempt, you must keep records. 
This may include: 

• Guest lists 
• Invoices 
• Cost per person 
• Event location 
• Gift receipts 
• Purpose of the expense 

A lack of documentation is one of the most common reasons businesses are caught out during an ATO review. 

How TaxAssist Accountants Can Help 

The rules around celebrations, gifts and entertainment can be confusing — especially during the festive season. 

We can help you: 

• Determine whether FBT applies 
• Apply the minor benefits exemption correctly 
• Calculate and report fringe benefits 
• Put processes in place for future compliance 

Book a FREE Initial Consultation 

If you'd like peace of mind before planning your Christmas party or staff gifting — we’re here to help. 

Book your free consultation with your local TaxAssist Accountant today by calling 1300 513 332 on send us an online inquiry on our website. 
We’ll make sure your celebrations are festive, compliant — and as tax-efficient as possible. 

Last updated: 27th November 2025