With Christmas fast approaching it is useful to remember that the Fringe Benefits Tax (“FBT”) minor benefits exemption threshold is now $300 (previously $100). With this in mind, the value of minor and infrequent rewards and gifts that can be provided to your employees without you as the employer incurring any FBT liability is quite significant. Changes to the minor benefit exemption now provides opportunities for employers to spend much more on the provision of entertainment fringe benefits and gifts to their employees.

How much can I spend at our next Christmas party without incurring any FBT liability?


The provision of a gift at the Christmas party, while treated as an associated benefit of the dinner, is considered separately in determining whether the minor exemption threshold applies. If the value of the Christmas party and the gift to the employee is less than $300 each, then both are considered to be exempt benefits.

Note: the exemption only applies to employers who adopt the actual method of accounting for entertainment expenditure for the FBT year, which requires actual costs of the provision of the entertainment to be recorded.

Note: These rules do not apply to tax exempt bodies.

What if I haven’t kept sufficient records to use the actual method?

It isn’t too late to implement policies and procedures to enable you to capture your entertainment expenditure so that you have alternative methods to determine your FBT liability at 31 March 2010. The 12-week register method allows you to determine a ‘register percentage’ to be applied against your total entertainment expense for the year.

How can Moore Stephens help?

Moore Stephens assists with procedures and tools you need to efficiently capture your entertainment expenditure.

Should you have any queries in relation to this matter, please do not hesitate to contact Robert Jackson or Michael Van Schaik on (03) 9614 4444.