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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
