Accounting & Tax on Christmas Presents

Hamish Mexted Accounting & Compliance, Odds & Ends, Reducing Tax

Accounting & Tax on Christmas Presents

Christmas is coming and it’s the season of entertainment and gift giving! During this time, the Chartered Accountant in us comes out and we start looking at the accounting and tax on Christmas presents.

 

Tax on staff Christmas Presents

Non-cash goods/services that are given to your staff members are dealt with under the FBT (Fringe Benefit Tax) rule. This will tax you at 49.25% of the value of the present (i.e. if you spend $1,000, you will get a tax bill of $492.50)

But there is a “de minimis” rule. This exemption gives you $300 per quarter to spend on presents for employees. Therefore you can spend up to $300 on each staff member and not have to worry about tax.

There are of course a number of criteria that you have to satisfy to be able to claim the “de minimis” exemption. Please contact us before buying any of those presents and we can talk you through it.

 

Activities & Functions

Are you looking to take your staff out to do an activity like 10-pin bowling or laser tag? As long as there’s no food or drinks involved, then you can claim it (make sure you check with us first)

 

Food & Wine

For Christmas lunches, dinners, ‘shouts’ at the local pub, and any staff parties, the normal entertainment rules apply. This means if you go out to a really fancy restaurant for your Christmas lunch, you can claim 50% of the expense for tax and GST.

 

If you have any questions please feel free to get in touch with us on 04 212 4977, either of our personal email address or by using [email protected]