The Fringe Benefits Tax and Income Tax rules surrounding work Christmas parties and gifts are complex.

A brief summary of the most commonly encountered scenarios for employers using the actual FBT method is provided below with full details at https://www.ato.gov.au/general/fringe-benefits-tax-(fbt)/in-detail/fbt-and-christmas-parties 

           
  Fringe Benefits Tax  Income Tax   GST
 Christmas Party - food drink and entertainment: cost $299 or less per employee  Exempt from FBT  Not tax deductible No GST credit claimable
 Christmas Party - food drink and entertainment: cost  $300 or more per employee  Subject to FBT  Is tax deductible GST credit claimable
 Food drink and entertainment provided to client/supplier  Exempt from FBT  Not tax deductible No GST credit claimable
 Gift to employee: $299 or less - not entertainment**  Exempt from FBT  Is tax deductible GST credit claimable
 Gift to employee: $299 or less - entertainment  Exempt from FBT  Not tax deductible No GST credit claimable
 Gift to client/supplier - not entertainment  Exempt from FBT  Is tax deductible GST credit claimable

* Entertainment = theatre, movie or sporting event tickets, gym membership, sporting club memberships
** Not entertainment = bottle of wine, Christmas hamper, perfume, flowers, pen