Claiming Christmas Expenses

Claiming Christmas Expenses


It’s always good to be aware of what’s claimable, here’s a quick list of expenses you can claim for Christmas parties and gifts. Please note, for Companies some expenses are 100% deductible while others are only 50% deductible. For Sole Traders, some expenses are less than 50%.

Staff Christmas Party

The costs of food & drink and any incidental expenditure relating to things like hireage of crockery, glassware, music or other entertainment is only 50% deductible for income tax purposes – this applies whether the party is held on the business premises or off site.

Christmas Lunch/Dinner

The cost of taking colleagues or staff out for an end of year lunch or dinner will generally be 50% deductible for companies and 25% deductible for Sole Traders.

Gifts to Staff or Clients

The cost of gifts (other than food and beverages) to staff or clients will generally be 100% tax deductible. Food, Beverages and Supermarket vouchers are deemed entertainment and only 50% deductible.

As long as your gifts to staff are under $300 (GST Inclusive) for the October to December quarter, and not food and drink, the costs will be 100% deductible. If they are over the $300 then FBT will be payable to IRD, however the costs can still be claimed as well.

Cash Bonuses for Staff

These must be included in the employees’ wages for the week and PAYE paid on them.

Please let us know what any Christmas expenses are for, so we can ensure the correct claims are made. Just jot down a quick description if possible and we’ll look after the rest. Alternatively if you’re coding your transactions just split the 50% or 25% ones into claimable / non-claimable.



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