Year-end (and other) staff parties
Editor: With the well earned December/January holiday season on the way, many employers will be planning to reward staff with a celebratory party or event. However there are important issues to consider, including the possible FBT and income tax implications of providing ‘entertainment’ )including Christmas parties_ to staff and clients.
FBT and ‘Entertainment’
Under the FBT Act, employers must choose how they calculate their FBT mean entertainment liability, and most use either the ‘actual method’ or the ’50/50 method’.
Under the actual method, entertainment costs are normally split up between employees (and their family? and non-employees (e.g., clients and suppliers).
Read more: Christmas Parties and FBT update 2018.pdf