Every year, businesses across Australia plan staff parties, rewards and gifts to thank their teams. And every year, many are caught off guard by something far less festive Fringe Benefits Tax (FBT).
It’s not deliberate the FBT rules around celebrations have a knack for showing up when you least expect them.
The venue matters.
Who attends matters.
What you spend matters.
Even whether you serve drinks on the premises on a working day matters.
The good news FBT doesn’t have to be complicated. A little clarity now can save you time, money and unwelcome surprises when tax time rolls around.
Here’s a practical breakdown to help you navigate silly season without accidentally creating a tax issue.
What actually triggers FBT at end-of-year celebrations?
The ATO looks at a few key factors
• The amount spent per employee
• The type of benefit provided (food, gifts, activities, vouchers, experiences)
• Where the event is held (on your premises vs offsite)
• Who attends (employees, their partners/associates, clients)
Sometimes, two events that look identical on the surface can be treated completely differently just because of these details.
When FBT doesn’t apply (the rules you definitely want to know)
You may be off the hook if your celebration or gifts fall under an exemption. The main ones are
1. Food and drink on your business premises (on a working day)
This is a property benefit consumed on-site meaning no FBT.
2. Food or drink offsite costing less than $300 per person
If it meets the requirements of a minor benefit, it’s exempt.
3. Infrequent gifts to employees under $300 per person
Again, the minor benefit rules may apply.
4. Recreational activities under $300 per person
Think golf days, mini-golf, bowling, team activities.
Important
Benefits provided to business clients are NOT subject to FBT.
So entertaining clients won’t create a liability.
What Business Owners Often Miss
Here are the three most common mistakes we see
1. Assuming “less than $300” automatically means exempt
It only counts if the benefit is infrequent and irregular.
2. Forgetting partners count as “associates”
If employees bring partners, the rules change.
Two people = two benefits.
3. Not keeping records
The ATO requires correct documentation.
Who attended, what was provided and what it cost all matter.
A quick checklist now saves unnecessary penalties later.
Your FBT Smart Celebration Checklist
Before confirming your event, ask yourself
• Where will the event be held?
• Who is invited? (employees, partners, clients)
• What is the cost per head?
• Is the gift/activity under $300 and infrequent?
• Are we keeping clear records?
If you can confidently answer those questions, you’re already well ahead.
A smoother celebration season starts with clarity
Your team deserves to be celebrated. And you deserve peace of mind knowing the celebration won’t come with a tax sting. If you’d like help reviewing your plans or guidance on what qualifies as a fringe benefit (and what doesn’t), the HTA Advisory team is here to support you.
