Tax and the festive season

Melissa Cameron • November 19, 2019

As the festive season approaches it’s time to start thinking about celebrations and spending time with friends and family. 

For most business owners, it also means it’s time to start thinking about saying thanks to your employees for another year of hard work. But it’s important to be aware of the tax implications of any gifts and celebrations you provide, as the rules can be complex.

Good gifts for tax purposes

If you decide to give your staff a Christmas present, the easiest way to avoid having to think about tax is to ensure your gift costs under $300 (inclusive of GST) and is considered a  minor benefit  by the tax man. This means the gift must be given on an infrequent or irregular basis – like every six months – and is not considered a reward for service. It’s also essential that the present is not considered entertainment. Examples of qualifying non-entertainment gifts include Christmas hampers, gift baskets, department store gift cards or vouchers, skincare and beauty products, sealed bottles of alcohol and flowers. If your gift meets all these criteria, it is exempt from any Fringe Benefit Tax (FBT) and you can also claim a tax deduction for it, plus the GST input tax credit if you are registered for GST.

Tax and entertainment

If you are conscious of paying extra tax on employee gifts, keep in mind that presents classed as entertainment may not be tax deductible. The tax man considers gifts like restaurant meals, holiday accommodation and tickets to movies, sporting events and concerts as entertainment, so they do not make great Christmas presents if you want to escape adding to your tax bill. If entertainment-type gifts cost less than $300 (inclusive of GST) FBT is not payable, but they are not tax deductible. You are also not permitted to claim the GST input credits. When entertainment gifts are given to clients over the holiday season, they are not subject to FBT but there is no tax deduction and the GST input credit cannot be claimed.

Christmas gifts to others (and yourself)

It’s worth remembering the minor benefits exemption for gifts costing less than $300 also applies to gifts provided to customers and business associates. This means you can also use it to provide a separate Christmas gift to the spouse or partner of an employee. Also, keep in mind that you can’t use these tax rules to give yourself a Christmas gift. If you operate as a sole proprietor or a partner in a partnership, you can’t be your own employee, so you aren’t eligible for these employee benefits.

Christmas parties and FBT

If you plan to hold a work  Christmas party  for employees or clients, you also need to follow the rules if you want to avoid paying FBT. The ATO hasn’t killed off the workplace Christmas party, as you are free to take advantage of the same $300 (including GST) minor and infrequent benefit exemption to hold a celebratory function for current employees and their family. The party does, however, need to be held on your premises during a business day.  To be free of FBT, the cost of food and drink consumed by current employees and family at the event must be less than $300 per head. However, there is no tax deduction or GST input credit claimable. If the cost of the on-site party is over $300 (GST inclusive) per head, then there is still no FBT payable for employees and clients but it is payable for any family members attending. Once you head off to a restaurant or club, there is still no FBT payable if the costs remain under $300 per head, as this is also considered a minor benefit. But once the per head cost rises over the $300 threshold, FBT is payable for employees and any family, but not for clients attending.

There’s still time to plan your end-of-year gift-giving and celebrations, but the clock is ticking. If you would like to find out more about tax deductions or your FBT reporting requirements, call us today.

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Do you know how your super is performing?

By Nikki Ashurst • November 2, 2026
Many Australians don't know how their super fund has performed or what it invests in. Are you one of them? Here's what to check and why it matters. Do you know how your super fund performed over the last two years? Many Australians don’t and are working towards their financial future without fully understanding one of their most important assets and without a clear plan for how their super may support them in retirement. That's not surprising, as many people view super as something that should run quietly in the background while they're busy with careers, families and everything else that life throws at them. But when you’re not sure what’s happening behind your balance, it’s harder to know whether you’re on track, whether your current approach reflects your goals or what opportunities might be available to help you make the most of what you’ve built so far. Your super isn't sitting in an account, it's invested Super is invested by a fund on your behalf across a mix of assets, with those investments working to grow your balance over time. Those include: Shares Ownership in Australian and international publicly listed companies. Their value can rise and fall, sometimes substantially over short periods but shares can provide capital growth over the long term. Property and infrastructure Real assets like office buildings, shopping centres, airports and energy networks. They can produce income and don't always behave in the same way as share markets, helping diversify investment holdings. Fixed interest and bonds Lending to governments and companies in return for interest. They can provide regular income and be steadier than shares, although returns and risk vary depending on the investment. Cash Generally, the most stable and lowest risk investment type. It can provide stability and faster access to money but typically offers lower longer term return potential. The investment option you choose determines the mix of assets held in your super based on your risk appetite. Most super funds offer options from conservative to high growth. If you’re young, a growth option with a higher exposure to growth assets like shares could offer higher returns over time – but it also comes with higher risk. As retirement nears, you might want to consider a more conservative approach with more defensive assets, like bonds for example to protect your savings. If you've never made a choice, you're probably in your fund's default option, which is designed to suit a broad membership. It’s worth knowing whether the mix you're in matches your circumstances and goals, including how far you are from retirement. Why performance alone is not a true comparison If you're thinking about how your super compares, returns are often where people start. The trouble is that a return figure means nothing without context: What it's being compared to Growth and conservative options invest differently and with different levels of risk. Compare like with like or the comparison may not be genuine. The comparison period A single year can be heavily influenced by short term market conditions. Super is measured in decades, so five, seven and ten year returns tell you far more about whether a fund is consistently doing its job, albeit not a predictor of future performance. Fees and tax Published returns should reflect investment fees, costs and tax but administration fees may be charged separately from your balance. Two funds quoting the same return can leave you in meaningfully different places once all fees are accounted for. Then there are the things that returns can't show you at all. For example, what insurance is attached to your account and what it's costing you, whether the fund offers guidance, tools and advice or simply sends a statement once a year. Another consideration maybe the level of support available when you need it. When comparing funds, it's worth looking at the full picture, including performance, fees, investment options, retirement support and member benefits. What today’s decisions mean tomorrow To understand how your super stacks up, start here: Find your investment option It's on your annual statement and in your online account. Look at what's in it Your fund publishes the asset allocation (shares, cash etc.) for each investment option. Check the long-term return for that option Focus on five and ten year returns, not just last year and compare them with equivalent options. Understand the total cost Add together administration fees, investment fees and insurance premiums as an annual dollar figure. Comparing super is about working out which option will perform best for you. Before you jump in, it’s worth understanding what's behind the numbers so you can make decisions based on more than a headline return. Knowing where you stand is the first step A super balance tells you where you are today. Understanding how your super is invested, how it compares and whether it's aligned with your goals helps show whether you're heading in the right direction. Source: MLC The information in this article does not take into account your objectives, needs and circumstances. We recommend that you obtain investment and taxation advice specific to your investment objectives, financial situation and particular needs before making any investment decision or acting on any of the information contained in this document. Subject to law, Capstone Financial Planning nor their directors, employees or authorised representatives gives any representation or warranty as to the reliability, accuracy or completeness of the information; or accepts any responsibility for any person acting, or refraining from acting, on the basis of the information contained in this document. Principal Wealth Management Pty Ltd trading as BMO Financial Solutions ABN 53 109 336 601 is a Corporate Authorised Representative (CAR 277821) of Capstone Financial Planning Pty Ltd ABN 24 093 733 969 Australian Financial Services Licence (AFSL) No. 223135.

The SMSF landscape is changing

By Jude Schofield • October 7, 2026
More Australians are choosing to take direct control of their retirement savings by establishing a self-managed super fund (SMSF) and according to the SMSF Association, Aussies now see their super as an important part of building and managing their overall wealth.