Christmas Party Decision Tree

This flowchart will help businesses work out the general tax implications of the year-end Christmas party.



  1. Minor benefit exemption must be less than $300 per benefit, provided on an Irregular and infrequent basis, and satisfy other relevant conditions.
  2. Income  tax  treatment  for  entertainment  expenses  determined under tax law.
  3.  An associate of  an employee is  widely defined. It  normally includes family members.

NOTE. This flowchart does not apply if you use the 50 /50 split or 12 week register in calculating FBT for meal entertainment.

Christmas Party Examples from the ATO


A small manufacturing  company decides to have  a party on its business premises on a working day before Christmas. The company provides food,  beer and wine.

The implications for the employer in this situation would be as follows.



Another company decides to hold its Christmas party function at a restaurant on a working day before Christmas and provides meals, drinks and entertainment.

The implications for the employer in this situation would be as follows.



This is a complex area of tax law, so please contact Taxwise on 08 9248 8124 for further guidance.

© Content of this blog is in partnership with Taxpayers Australia


Warren Kruger

Specialist Tax Consultant - “Helping YOU Pay The Correct Tax And Not A Penny More”. My story starts on Christmas Eve, back in 1983 in South Africa.

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