Don’t blame the tax man for being a Scrooge this Christmas

by Elyse on October 5, 2008


It’s the Staff Christmas Party and the boss gets up to say his customary ‘we have to work harder’ speech and explain why there are no presents for the staff again this year…”it’s because of that Fringe Benefit Tax thing”; well doesn’t the boss know that the Fringe Benefits tax law changed in 2007? Prior to 2007 businesses were only able to claim up to $100 per employee on Christmas Gifts; anything over that amount would be liable to pay Fringe Benefits Tax at a rate of 46.5 per cent. (Source: Spread the Christmas Cheer to Staff, The Daily Telegraph, Nov 19, 2007 http://www.news.com.au/couriermail/story/0,23739,22779146-37775,00.html)

In 2007 this law was modified to make it easier for employers to reward and thank their staff with a gift at Christmas time. Below is an excerpt from The Australian Taxation Office website outlining the current Fringe Benefits Tax law in regards to Christmas Gifts:


Gifts provided to employees at a Christmas party

The provision of a gift to an employee at Christmas time may be a minor benefit that is an exempt benefit where the value of the gift is less than $300.

Where a Christmas gift is provided to an employee at a Christmas party that is also provided by the employer, the benefits are associated benefits, but each benefit needs to be considered separately to determine if they are less than $300 in value. If both the Christmas party and the gift are less than $300 in value and the other conditions of a minor benefit are met, they will both be exempt benefits.

To read more about Fringe Benefits Tax on employee gifts follow this link to the relevant page on the Australian Taxation Office website: http://www.ato.gov.au/businesses/content.asp?doc=/Content/51481.htm&page=2&H2 . While the information provided is useful as background information you should always check with your accountant before making a decision as some businesses may not be exempt from the tax.

With this knowledge there is definitely no excuse this year to not buy Christmas Gifts for your employees and their partners. For some present ideas have a read through Our Guide to Christmas Gifts and browse through our 2008 Christmas Catalogue.

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