Whether you’re planning a staff Christmas party, preparing client gifts, or trying to avoid the dreaded January cash-flow crunch, here are practical, ATO-aligned tips to help you celebrate smartly.
- Plan Ahead for Holiday Cash Flow
December is a unique month for business. Sales may rise, but so do costs followed by a slow and quiet January. That’s why cash-flow planning is your best Christmas gift to yourself.
Quick wins to stay in control:
- Forecast early: List all expenses from December to February: stock orders, wages, bonuses, parties, gifts, subscription renewals, holiday closures, and BAS lodgement dates.
- Invoice ASAP: Send invoices before clients disappear on holiday mode.
- Offer prepayment incentives: Gift cards, prepaid packages, or early-bird deals can boost small business cash flow before the holiday slowdown.
Helpful tools:
👉 ATO Cash Flow Support – https://www.ato.gov.au/business/small-business-entity-concessions/cash-flow-support/
👉 ASIC MoneySmart Budget Calculators – perfect for planning festive expenses
- Christmas Parties: What You Can and Can’t Claim
Before you book that venue or lock in a caterer, it’s important to understand how the ATO treats Christmas entertainment and Fringe Benefits Tax (FBT).
Here’s a simple breakdown:
- On-premises party, during work hours, employees only
→ No FBT, no deduction, no GST credits
- Off-site party costing under $300 per employee
→ No FBT, but no deduction/GST credits
- Off-site party costing over $300 per head
→ FBT applies, deduction & GST credits allowed
ATO entertainment rules:
👉 https://www.ato.gov.au/business/fringe-benefits-tax/types-of-fringe-benefits/entertainment/
- Christmas Gifts: Employees vs Clients
Not all gifts are treated equally under the ATO’s rules. Whether a gift is considered entertainment determines if it’s deductible and whether GST credits apply.
🎁 Gifts for Employees
- Under $300 and considered minor & infrequent → Usually no FBT
- Non-entertainment gifts (hampers, gift cards, skincare, tech) → Tax-deductible + GST credits
🎁 Gifts for Clients
- No FBT
- Non-entertainment gifts → Deductible
- Entertainment gifts (e.g., tickets to events or experiences) → Generally not deductible
Learn more:
👉 https://www.ato.gov.au/business/fringe-benefits-tax/
- The $300 Minor Benefits Rule (Your Best Friend at Christmas)
This rule is crucial for small business owners looking to remain compliant while showing appreciation.
A benefit may be exempt from FBT if it meets ALL of these:
✔ Costs less than $300 (including GST)
✔ Is infrequent or irregular
✔ Is considered unreasonable to treat as a fringe benefit
This is why many businesses stick to modest gifts and small-scale celebrations—they’re meaningful, appreciated, and tax-efficient.
More information:
👉 https://www.ato.gov.au/business/fringe-benefits-tax/
- Keep It Merry, Smart & Stress-Free
A few final reminders for a financially healthy Christmas season:
- Use ASIC MoneySmart tools to budget and avoid overspending
- Plan ahead to avoid the January cash-flow slump
- Keep records of all festive expenses for ATO compliance
- Celebrate joyfully—without creating tax surprises for next year
🎁 Happy Holidays from Business Genie
From all of us at Business Genie, we wish you a bright, stress-free, and money-smart festive season.
If you need help with BAS services, GST, FBT guidance, or small business bookkeeping, we’re here to support you.
👉 Visit us at www.businessgenie.com.au
✨ Stay festive, stay compliant, and start the new year with confidence!
