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Gift cards for employees

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Newbie

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If we buy gift cards for employee (say $500 per employee), do we pay FBT on that? Or any type of tax on the gift cards?

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Taxicorn

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@danhendo888 

Non-entertainment gifts given to staff (including working directors) are usually exempt from FBT where the total cost is less than $300 inclusive of GST per staff member.

 

Gift vouchers fall into the non-entertainment category.

 

A tax deduction and GST credit can also be claimed.

 

The $300 minor benefits exemption also separately applies to any gifts provided to associates meaning that a similar gift can also be provided to a spouse or partner of the staff member with the same favourable tax outcome.

 

Providing employees “non-entertainment gifts” of $300 or more GST inclusive is less tax effective. A tax deduction and GST credit can still be claimed, but FBT is payable at the rate of 49 per cent on the grossed-up value (currently 2.0802).

 

Entertainment expenditure incurred in relation to non-employees (i.e. customers, clients, etc.):

  • NOT subject to FBT;
  • NO income tax deduction; and
  • NO GST credit available.

 

https://www.ato.gov.au/law/view/document?DocID=SAV%2FFBTGEMP%2F00021

1 REPLY 1
Highlighted

Best answer

Taxicorn

Replies 0

@danhendo888 

Non-entertainment gifts given to staff (including working directors) are usually exempt from FBT where the total cost is less than $300 inclusive of GST per staff member.

 

Gift vouchers fall into the non-entertainment category.

 

A tax deduction and GST credit can also be claimed.

 

The $300 minor benefits exemption also separately applies to any gifts provided to associates meaning that a similar gift can also be provided to a spouse or partner of the staff member with the same favourable tax outcome.

 

Providing employees “non-entertainment gifts” of $300 or more GST inclusive is less tax effective. A tax deduction and GST credit can still be claimed, but FBT is payable at the rate of 49 per cent on the grossed-up value (currently 2.0802).

 

Entertainment expenditure incurred in relation to non-employees (i.e. customers, clients, etc.):

  • NOT subject to FBT;
  • NO income tax deduction; and
  • NO GST credit available.

 

https://www.ato.gov.au/law/view/document?DocID=SAV%2FFBTGEMP%2F00021