What Is Tax Deductible At Your Company Christmas Party?

By this time of year, most people have already planned their Christmas celebrations. As far as your business is concerned, if you are organising a Christmas event or party with your colleagues and employees, a couple of things come to mind.

1. What happens if someone drinks too much? Who is held accountable?
2. What is tax deductible?

The first one is a legal argument, but generally, if an employee is at a work-related party and even if a couple of employees leave that after party, they are still potentially open liability for you and the worker’s compensation. So it’s important to check out the legalities of organising parties with your employees.

Secondly, you want to ask yourself what is tax deductible in terms of your Christmas party. Can you have lunch or a bit of alcohol, and what (or how much of it) is deductible?

[ctt template=”9″ link=”e6f28″ via=”no” ]What is tax deductible in terms of your Christmas party? The general rule is anything less than $300.[/ctt]

The general rule is that anything under $300 can be classified as a fringe benefit and is under the limit. So you can run with that – less than $300. If you have a party in-house, it is fine, but the take-home point is that there will be consequences if you spend more than that per person for the party.

You might also be interested in: How Much Do You Know About Tax Deduction?

If you would like further clarification on either of the above points, please contact us and we will be happy to offer you assistance.

From behalf of the entire team at Shuriken, we wish you a happy holiday season and we look forward to seeing you again in 2017!