End-Of-Year Work Parties: What Employers Need to Know
The end-of-year party is a great way to thank your team for their efforts throughout the year.
But while the festive season is about celebration, employers also need to keep an eye on the responsibilities that come with hosting staff events.
From tax implications to legal obligations, there are a few key points to keep in mind.
Tax Considerations
One of the most significant areas of concern is Fringe Benefits Tax (FBT). If you provide food, drinks, or entertainment to staff and their families, it may be subject to FBT unless specific exemptions apply.
For example, holding the party on your business premises during a working day may fall under the “minor benefits exemption,” provided the cost per head is below $300. Once you move offsite or the cost per person exceeds this threshold, the rules change, and you may be liable.
Keeping accurate records of costs and attendees will help you determine if FBT applies.
Client gifts or staff presents also need to be carefully considered. Cash bonuses are always taxable, but non-cash gifts can sometimes fall under the minor benefits exemption. Recording these appropriately will avoid surprises at tax time.
Legal Issues
Beyond tax, there are legal obligations to consider. Employers have a duty of care to provide a safe environment, even at a party.
This includes managing alcohol consumption, preventing harassment, and ensuring responsible behaviour. Clear communication about expected conduct, along with practical measures such as limiting drink service or providing transportation options, helps reduce risks.
Failing to manage these responsibilities can expose a business to legal claims, reputational damage, or employee disputes that may persist long after the event. Avoid potential liability concerns by making sure there is a clear expectation and understanding of the behaviour to be had at the party, that everyone can get home safely, and that there is a duty of care to your employees.
What to Account For
As an employer, your checklist should include:
- Reviewing FBT thresholds and exemptions before booking the event.
- Recording expenses and distinguishing between staff and client costs.
- Setting clear behavioural guidelines for employees.
- Considering practical measures such as responsible service of alcohol, safe transport options, and accessibility.
A Christmas party should be a time of connection and celebration, not compliance stress. By keeping both tax and legal obligations in mind, you’ll protect your business while still giving your team the festive send-off they deserve.
Please reach out to your Walshs team member if you would like to discuss any of the above.
