How To Claim Christmas Gifts as a Tax Deduction

Holding a Christmas party is a great idea.  But did you know the cost of holding a Christmas party for your employees is regarded as “entertainment” expenditure is not tax deductible if the cost per employee is less than $300. If the cost is more than $300 per employee, then you can claim it as a tax deduction but you have to pay FBT.

How much can I claim for gifts?

You can claim less than $300 for ‘non-entertainment' gifts as a tax deduction. This could be for special occasions like birthdays and Christmas.  As long as these gifts are ‘infequent’, you can claim amounts for less than $300 for employees which include family members, but not more than $300 including all family members. For example, you could give each employee 'infrequent' gifts throughout the year providing each gift is less than $300.  Gifts to clients and suppliers are also tax deductible for which the  $300 limit does not apply.

What gifts are tax deductible?

The types of gifts can include skincare and beauty products, flowers, alcohol,  perfumes, gift vouchers and hampers, groceries, games, TV sets, computers, crockery and garderning equipment.

Gifts which are NOT allowable deductions generally include tickets to attending a theatre, play, sporting event, movie or the like. Holidays and accomodation or admission tickets to an amusement centre are
also not allowable.
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