Just a quick note on the tax treatment of staff gift cards, as this comes up often around Christmas and birthdays.
- Tax Deduction: The cost of gift cards given to staff is deductible to your business as an employee expense.
- GST: No GST credits can be claimed when purchasing gift cards.
- Fringe Benefits Tax (FBT):
- A one-off Christmas gift card under $300 per employee will usually fall under the “minor benefits exemption” and avoid FBT.
- However, if you also give birthday gift cards every year, the ATO may see this as a regular and expected benefit. Even though each card is under $300, the combined regularity means the minor benefit exemption may not apply, and FBT could be payable.
In short:
- One-off gifts under $300 are generally fine.
- If you give both Christmas and birthday gift cards every year, there’s an increased risk of FBT applying.
You can still claim a deduction in either case, but we just need to be mindful of the FBT position.
Please let Advisory One know if you’d like me to run through the FBT costings for your business so you can weigh up the best approach.
You can contact our office on 02 6324 5888 or email us at admin@advisoryone.com.au
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