Institute of Certified Bookkeepers

Source: ATO – Work Christmas parties and FBT

'Tis the season to be jolly!

If you're involved in the administration of fringe benefits tax (FBT) for your organisation, be sure to plan ahead this festive season.

When rewarding employees with gifts or parties at Christmas, FBT may apply. Even if your organisation is exempt from income tax, providing food and drink could constitute a tax-exempt body entertainment fringe benefit.

There's good news, though. Some FBT exemptions might apply in your circumstances.

Meal entertainment provided by public benevolent institutions, health promotion charities, public hospitals, non-profit hospitals and public ambulance services to employees is exempt from FBT unless it's provided under a salary packaging arrangement on or after 1 April 2016.

Also, minor and infrequent gifts might be exempt from FBT.

So, start planning now to work out how much FBT you will have to pay – on top of the cost of the function and gifts this festive season.

  • 20th November, 2018
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