Hamper giving and tax - what all employers need to know

Did you know that throwing a staff Christmas party is regarded as ‘entertainment’ for tax purposes?  This means that the cost of your company Christmas party is both

-       not tax deductible

-       AND subject to fringe benefits tax (FBT) !!


On the other hand, giving your employees a hamper is regarded as a ‘minor benefit’ by the ATO.  So what is a minor benefit? Well, a minor benefit is defined as one that is provided to staff or their associates, on an ‘infrequent’ or ‘irregular’ basis, is not considered a reward for services, and the cost is less than $300 ‘per benefit’ inclusive of GST.


So, it is a better idea to give your employees ‘non-entertainment’ gifts, like a gift hamper, as the amount is fully deductible with no FBT payable (if under $300 per hamper).


The $300 minor benefits exemption also applies to hampers given to spouses or partners of the staff member.


Employers should avoid giving ‘entertainment’ gifts, like tickets to sporting events or the theatre, or providing a holiday.  These gifts are subject to FBT at a rate of 46.5% AND are not tax deductible, if the cost is greater than $300.  However, if the cost is less than $300, although not subject to FBT, the expense is non-deductible.


Still not sure what to give staff members?  The best tax outcome for your business is to give employees non-entertainment gifts, like gift hampers, which cost less than $300 each, as these will not attract FBT and will be tax deductible to your business. 


So what are you waiting for?  Ditch those ‘entertainment’ theatre tickets and give employees the gift of a hamper!

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