Buying gifts for your staff or customers this holiday season? Some of these expenses might qualify for tax deductions. Here’s a quick rundown:
Staff Gifts
- Fully deductible and FBT exempt if the total cost per staff member in one quarter is under $300 (including GST).
- Non-entertainment items like gift vouchers, hampers, flowers, and wine qualify.
- There’s a yearly cap of $22,500 for combined employee benefits.
Client Gifts & Entertainment
- Some are fully tax-deductible, while others are 50% deductible, especially those involving food, drink, or entertainment.
- 50% deductible: Hampers with gourmet food, chocolates, biscuits, Christmas ham, wine.
- 100% deductible: Books, gift vouchers, movie tickets, flowers, rugby game tickets.
Entertainment
- 50% deductible: Staff Christmas parties (on or off business premises), drinks at a bar, meals with clients or team members.
- 100% deductible: Morning or afternoon tea for your team, catered team lunch in the office, restaurant vouchers for staff, donations to a Christmas party in a children’s hospital.
Cash Bonuses
- Should go through the payroll system with PAYE and other payroll taxes deducted. These are taxed at a flat rate based on the employee’s income range
If you have any tricky questions, feel free to reach out – we’re here to help!
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