A little mis-confusion.
I understand that an employee gift of less than $300 is considered a minor gift, which then makes it fbt exempt. However, if an item is FBT exempt, doesn't that ALSO disallow a tax deduction or GST credit?
I am talking about a Gift here, not entertainment, and less than $300
thanks
Hey @MollyM,
Non-entertainment gifts provided to employees are usually exempt from fringe benefits tax (FBT) if the total cost is less than $300 inclusive of GST per employee. Some examples of non-entertainment gifts include flowers, non-entertainment based gift vouchers, hampers, and skincare products.
A tax deduction and GST can still be claimed.
If the gift is entertainment based and under $300 (GST inclusive), FBT wouldn’t be payable, but you wouldn't be able to claim a tax deduction or GST credit. Entertainment gifts would include paying for a holiday, and tickets to see a movie, sporting event or a theatre show.
More information can be found on our FBT Guide for Employers (chapter 20), and this previous community post :)
Hey @MollyM,
Non-entertainment gifts provided to employees are usually exempt from fringe benefits tax (FBT) if the total cost is less than $300 inclusive of GST per employee. Some examples of non-entertainment gifts include flowers, non-entertainment based gift vouchers, hampers, and skincare products.
A tax deduction and GST can still be claimed.
If the gift is entertainment based and under $300 (GST inclusive), FBT wouldn’t be payable, but you wouldn't be able to claim a tax deduction or GST credit. Entertainment gifts would include paying for a holiday, and tickets to see a movie, sporting event or a theatre show.
More information can be found on our FBT Guide for Employers (chapter 20), and this previous community post :)
very helpful explanation and guidance
Would a cash gift (rather than a voucher) under $300 still be deductible?
Hi @MG42,
No, a cash gift under $300 would not be deductible as it's considered salary or wages, not a fringe benefit. Cash gifts are treated as ordinary income for tax purposes and don't qualify for the minor benefit exemption under FBT rules.
The $300 minor benefit exemption only applies to non-cash benefits that meet specific criteria. When you provide cash to employees, it becomes part of their assessable income and you'll need to include it in their salary and wages for PAYG withholding purposes.
Hello,
I am a sole trader GP (no employees) works as a contractor with a clinic.
I purchase small Non-entertainment gifts (around $50 per person) for clinic staff (who are not my employees) on occasions such as Christmas, birthdays, or Nurses Day, with the intention of maintaining and supporting my working relationship with the team as business associates.
Can I claim these gifts as a tax deduction as an expense incurred in gaining or producing my assessable income?
Thank you.
Hi @Ahmadsalman86,
You can't claim a tax deduction for gifts to clinic staff who aren't your employees. The general rule is that you can only claim deductions for expenses incurred in gaining or producing your assessable income, and the expense can't be a private expense.
Gifts to people who aren't your employees are typically considered private expenses, even when given to maintain business relationships. The fact that the clinic staff work at the same location and support your working environment doesn't make these gifts deductible as business expenses.
If you were employing these staff members directly, the tax treatment might be different, but as they're employed by the clinic (not by you), the gifts remain non-deductible.
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