With Christmas around the corner, small businesses will need to take into consideration if they will need to pay fringe benefits tax (FBT) when rewarding employees with gifts or parties.
For your work Christmas party, the ATO recommends that small businesses consider the following:
- How much the event costs
- Where and when it is held – a Christmas party on a normal working day can be treated differently to an event that is held outside of work
- Who is invited – will this be employees, or are their partners, clients, or company suppliers also invited?
For Christmas gifts, small businesses will need to give thought to:
- The amount spent on gifts
- Type of gift – gifts such as wine or hampers, for example, are treated differently to gifts like tickets to a movie or a sporting event
- Who is receiving the gift – there are different rules for employees, clients and suppliers
For more information, visit the ATO website.