End-of-Year Celebrations and FBT: What Employers Should Know

End-of-year celebrations are a great way to recognise your team’s efforts, whether through a staff function, gifts, or a team activity. However, it’s important to be aware of how Fringe Benefits Tax (FBT) may apply so there are no surprises later.

When FBT may apply

Whether FBT is payable will depend on a number of factors, including:

• the cost per employee

• the type of benefit provided (for example, meals, gifts or activities)

• where and when the benefit is provided

• who attends, such as employees only or also their partners, or clients

Common situations where FBT may not apply

FBT exemptions or concessions may be available in a range of circumstances, including:

• food and drinks provided to employees on business premises during a working day (excluding alcohol)

• low-value, infrequent benefits costing less than $300 per person that qualify as “minor benefits”, such as:

  • staff gifts

  • meals held off-site

  • recreational activities like a golf day

• benefits provided to business clients, which are generally outside the FBT rules

The importance of planning and records

To stay compliant and avoid unexpected tax outcomes, employers should:

• plan celebrations with FBT in mind before committing to costs

• keep clear records of expenses, attendees and the purpose of each event

• review whether benefits provided meet the requirements for any FBT exemptions

If you’re unsure how FBT may affect your end-of-year celebrations, getting advice can help structure events in a tax-effective way.