There are many ways to reward your loyal staff. At Christmas time, you might be thinking about a gift. The tax consideration for buying a staff gift is more complicated, as it involves Fringe Benefits Tax.

The two most important aspects to consider to maximize your tax deductions are:

1. The cost of the gift needs to be less than $300 GST Inclusive for each staff member.
2. The gift should be a 'Non-Entertainment' gift. If you meet these two parameters, you will get a full tax deduction for the expense, claim the GST credits, and it has no FBT consequences.

If you spend above $300 on a 'Non-Entertainment' gift, FBT will be applicable.

If you buy an 'Entertainment' gift under $300, there is no tax deduction and no GST credit.

If you buy an 'Entertainment' gift over $300, FBT will be applicable.

Some examples of 'Entertainment' gifts are: Theatre tickets, movie tickets, sporting event tickets, hired entertainers, flights, and holiday accommodation, etc.

Some examples of 'Non-Entertainment' gifts are: Flowers, electrical goods (e.g., TV), bottled spirits and beer, Christmas hampers, gift vouchers, etc.

To maximize your tax deductions, try to find 'Non-Entertainment' gifts under $300 for your staff. If you are unsure about a particular item, please feel free to ask.