Christmas Gifts for Employees, Clients and Suppliers

Christmas Gifts for Employees

Are gifts to your employees claimable? Gifts may be classified as “entertainment” or “non-entertainment”.The provision of a gift
to an employee at Christmas time, such as a hamper, may be a minor benefit that is an exempt benefit where the value is less
than $300. Where the gift is given at the Christmas party, each benefit can be considered separately.

For gifts such as wine, food, hampers, vouchers, etc., these are not considered to be entertainment.

  • If the gift is a minor benefit (i.e., less than $300 value), then the gift is not tax deductible, and therefore GST is not claimable for
    gifts to employees and their family members. No FBT applies to gifts of less than $300.
  • For gifts over $300, FBT may apply for employees and their family members.

Gifts such as a holiday, membership to a club, or tickets to a theatre, sporting or musical event are considered to be entertainment.

  • For minor benefits, as above, the gift is not tax deductible and no FBT applies.
  • For employees this is not a minor benefit, the gift is tax deductible but it is also subject to FBT.

Christmas Gifts for Your Clients and Suppliers

Are gifts to your clients and suppliers claimable? Gifts may be classified as “entertainment” or “non-entertainment”.

  • For gifts such as wine, food, hampers, vouchers, etc., these are not considered to be entertainment. Non-entertainment gifts to
    clients or suppliers are deductible and GST is claimable.

Gifts such as a holiday, membership to a club, or tickets to a theatre, sporting or musical event are considered to be entertainment.

  • For clients and suppliers, the entertainment gift is not tax deductible, and no FBT applies, no GST is claimable.

source – (ICB – www.icb.org.au/news)

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