Can an employer give gifts to an employee?

Are gifts to employees tax deductible

Non-entertainment gifts

• Non-entertainment gifts can include products, flowers, wine, perfumes, gift vouchers and hampers.
• Gifts to employees and family members attract FBT and are tax deductible. If their value is less than $300 including GST and they are considered infrequent and irregular, they fall under the minor benefit exemption (read more about this below) which means they don’t attract FBT but are still tax deductible.

Entertainment gifts

• Gifts that are considered to be entertainment may include sporting tickets, movie tickets, overseas plane tickets, tickets to attend the theatre.
• Entertainment gifts over $300 (incl GST) to employees and family members attract FBT and are tax deductible. If their value is less than $300 including GST and they are considered infrequent and irregular, they fall under the minor benefit exemption (read more about this below) which means they don’t attract FBT and are NOT tax deductible.

Are gifts to clients tax deductible?

What is the minor benefit rule?

• A minor benefit is one that is provided to an employee or their associate
• Is given on an “infrequent” or “irregular” basis
• Not a reward for services
• Costs less than $300 (inclusive of GST) “per benefit”. Entertainment expenses are not tax-deductible unless they are subject to FBT.