Managing Entertainment and Gift Expenses for the Festive Season

Rules for buying Christmas Gifts for staff and clients

How to enjoy all the bells and whistles without the tax headache

Parties and gifts are all part of the festive fun but they can cost a small fortune.

Here’s a list of the rules around entertainment expenses so you know what’s deductible and non-deductible before you fork out for your staff and customers.

  • To claim 100% of your customer gifts, keep it non-food or drink related. Book vouchers, tickets to a sports match or a personalised calendar as these can be claimed in full.
  • Got a staff party planned? Half of your food, drink, entertainment and venue hire can be claimed in your GST and income tax returns.
  • You don’t need to pay Fringe Benefit Tax on entertainment expenses (that come under the 50% deductibility rules) unless it’s being enjoyed by staff outside of their work duties.
  • Heading to Aussie for a fun-filled weekend with your staff? It’s 100% deductible (and they’ll love you for it!)
  • If you’re giving customers and staff food and wine for their efforts you can claim 50% as a business expense.
  • Donating to charity this Christmas? You can deduct 100% of the cost of entertainment you provide to members of the public for charitable purposes.
  • If you’re taking your family (who don’t work for you) out for brunch to thank them for putting up with your long hours… it’s not deductible because it’s not related to generating income for your business.
  • Taking the team out for lunch? Ordering in a Christmas feast? You can claim 50% as a business expense whether you’re out of the office or on-site.
  • Top tip: If you run out of time to organise Christmas gifts for customers, why not surprise them with a ‘Welcome back to work’ prezzie in the New Year?

Remember to keep your invoices and receipts for business entertainment expenses. If you have any questions about what’s deductible and non-deductible, give us a call on (06) 878 8824.