Can staff celebrations attract FBT?

With the holiday season coming up, employers may be planning to celebrate with their employees.

Before they hire a restaurant or book an event, employers should make sure to work out if the benefits they provide their employees are considered entertainment-related, and therefore subject to fringe benefits tax ('FBT').  This will depend on:

• the amount they spend on each employee;

• when and where the celebration is held;

• who attends — is it just employees, or are partners, clients or suppliers also invited?

• the value and type of gifts they provide.

Employers who do provide entertainment-related fringe benefits should keep records detailing all of this information so they can calculate their taxable value, as well as determining if the minor benefits exemption may apply to the provision of this entertainment.

If you are unsure of your specific obligations, or have any questions in regards to this, please contact our team.