Announcements
Curious about the JobMaker Hiring Credit? Have a read about who is eligible and how to register.

ATO Community

Gift cards to employees

Newbie

Views 16364

Replies 3

Fringe Benefits Tax

 

1.Can we purchase gift cards for $300 or does it need to be LESS than $300 to be exempt from FTB?

2.Is $300 the limit per employee per year to be exempt?

3. Is the cost of the Christmas lunch added to the cost of the gift card - or are they separate benefits?

 

Thank you.
Sam

 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Certified Response

Devotee

Replies 2

Hi @Penmans,

 

Thanks for getting in touch! It sounds like you're referring to the minor benefits fringe benefits tax exemption.

 

Minor benefits are generally exempt from fringe benefits tax. A minor benefit is a benefit which is both:

  • less than $300 in value (before 1 April 2007 the amount was less than $100), and
  • unreasonable to treat as a fringe benefit.

The notional taxable value of a minor benefit is usually considered to be the amount that would be the taxable value if the benefit was a fringe benefit.

 

There are certain criteria that you'll need to keep in mind when decided if a gift is a minor benefit - we'd encourage you to check out chapter 20 of the Fringe benefits tax - a guide for employers and search for the term 'minor benefit' to find out more.

 

The fringe benefits tax also includes examples of when the minor benefits exemption applies - for example:

           "It is common practice for employers to give employees gifts on special occasions, such as at Christmas time. A single gift to each employee of, say, a bottle of whisky or perfume would be an exempt benefit, where the value was less than $300. If the gift is provided at a Christmas party, the gift needs to be considered separately to the Christmas party when considering the minor benefits threshold."

 

Hope that helps!

 

3 REPLIES 3

Most helpful response

ATO Certified Response

Devotee

Replies 2

Hi @Penmans,

 

Thanks for getting in touch! It sounds like you're referring to the minor benefits fringe benefits tax exemption.

 

Minor benefits are generally exempt from fringe benefits tax. A minor benefit is a benefit which is both:

  • less than $300 in value (before 1 April 2007 the amount was less than $100), and
  • unreasonable to treat as a fringe benefit.

The notional taxable value of a minor benefit is usually considered to be the amount that would be the taxable value if the benefit was a fringe benefit.

 

There are certain criteria that you'll need to keep in mind when decided if a gift is a minor benefit - we'd encourage you to check out chapter 20 of the Fringe benefits tax - a guide for employers and search for the term 'minor benefit' to find out more.

 

The fringe benefits tax also includes examples of when the minor benefits exemption applies - for example:

           "It is common practice for employers to give employees gifts on special occasions, such as at Christmas time. A single gift to each employee of, say, a bottle of whisky or perfume would be an exempt benefit, where the value was less than $300. If the gift is provided at a Christmas party, the gift needs to be considered separately to the Christmas party when considering the minor benefits threshold."

 

Hope that helps!

 

I'm new

Replies 1

Hello,

 

How many gifts card per year are deemed 'reasonable'?

 

Eg. Would a $250 gift card in June, a $250 gift card in Dec and a $100 gift card on someones birthday (all to the same employee) be considered as too frequent to be a minor benefit?  Would there be no FBT on this, FBT at the point of exceeding $300 (which could differ per employee depending on when their birthday is), or FBT on the $600 total?

 

Thanks

Community Support

Replies 0

Hi @CJM

 

These sort of things often move to intent however we sight examples generally to help give context as shown in the above post. If your circumstances move outside that and your concerned you can always seek advice with our Early engagements team or a private ruling.