With the holiday season coming up, employers may be planning to celebrate with their employees.

Before they hire a restaurant or book an event, employers should make sure to work out if the benefits they provide their employees are considered entertainment-related, and therefore subject to fringe benefits tax (‘FBT’). This will depend on:

  • the amount they spend on each employee;
  • when and where the celebration is held;
  • who attends — is it just employees, or are
    partners, clients or suppliers also invited?
  • the value and type of gifts they provide.