How to avoid FBT at your end-of-year party

It’s the end of the year and the festive season has arrived, along with party season.

So, how do you have a great party to celebrate your staff and business achievements from 2020 without having to pay Fringe Benefits Tax (FBT)?

 

Here’s some top tips for enjoying your party and avoiding FBT:

 

Are you holding your party outside business premises?

In that case, the best thing to do is keep costs for the party below $300 per employee. Also try to keep costs for any attending family members and gifts below that limit to remain FBT exempt.

 

Or will it be on business premises, on a working day?

If you plan to only have employees in attendance, the costs of the party can be above $300 per employee and remain exempt from FBT. However, any gifts still need to be below $300.

If you plan to have spouse and family attend as well as employees, aim to keep costs below $300 per person. If you go over this, you’ll have to pay FBT on the costs of the party that relate to the non-employee attendees. 

 

Do you plan to have clients, customers or suppliers attend the party?

Easy peasy! FBT doesn’t apply to any party of gift costs that relate to clients or suppliers. 

 

A simple rule is to try and always keep costs for the party and any gifts below $300 per person. That way, no matter where and when the party is or who is in attendance, you’re covered and should be able to avoid paying FBT on your festivities.

 

All businesses have worked hard with the turbulence that 2020 brought us. So go party, enjoy your year-end and have a safe festive season!

 

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