A non-entertainment gift (such as a Christmas hamper or take-home bottle of wine) to an employee, providing the gift is under $300, is tax deductible, GST claimable and there is no Fringe Benefits Tax (FBT) payable as this is considered a “minor benefit”. If the gift is $300 or more in value then Fringe Benefits Tax has to be paid. We therefore recommend that if you’re giving gifts that you keep each gift under $300 to avoid having to pay FBT.
If the gift is considered “entertainment” and worth $300 or more then FBT is payable and it is tax deductible. Entertainment is things such as theatre, sport, movie, venue or airline tickets. To avoid having to pay FBT it’s best to give non-entertainment gifts under $300 in value. However, please note that even if the entertainment gift is under $300, although you don’t need to pay FBT on the gift, it is also not available as a tax deduction.
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