Christmas parties, end of year work lunches or dinners, gifts for staff and clients – December can certainly be a busy and sometimes expensive month.
Do you know what you can claim and how much? We have put together answers to some of the most frequent questions we get asked.
Staff Christmas Parties
If the party is held onsite or offsite the treatment is the same – food, drink, venue hire, and entertainment are only 50% deductible. If you are taking staff out for a Christmas lunch or dinner, the same applies.
Most gifts you give to staff are 100% deductible. The exceptions are food and drink, which are only 50% (this includes any vouchers for food or drinks). The same applies for gifts to clients.
Promotional gifts that include your branding are 100% deductible.
Please also consider the dollar value of any staff gifts as you will be required to pay Fringe Benefit Tax (FBT) on any employee gifts that cost over $1200 per year ($300 per quarter). As a business owner if you get paid via payroll with PAYE deducted you can also receive the FBT gift allowance per year/quarter.
Any bonuses paid must go through the payroll system and have PAYE deducted.
Donating gifts or food is 100% deductible.
To make things easier for year end, if you are coding your own transactions, please make detailed descriptions and attach receipts in Xero.
If we are doing your bookkeeping for you, you may receive an email requesting more information for any transactions we are unsure of.
Reach out to one of the team if you have any further questions.