The cost can be exempt as an exempt property benefit or an exempt minor benefit.

Exempt Property Benefits

• Costs like food and drinks for employees as part of a Christmas party, provided on a working day on business premises and consumed by current employees of that business.

Exempt Minor Benefits

Rule can apply when the property benefits exemption doesn't apply, because the party is held at a restaurant or separate venue.

• Cost per employee must be less than $300 (GST inclusive)
• Associates of employees such as spouses and children are regarded as employees (hence the limit for an employee and partner would be $300 each)

Gifts are also considered separately from the Christmas party, so provided the cost of a gift and the party are each less than $300, then both would be exempt from FBT.

The minor benefits threshold of less than $300 applies to each benefit provided, not to the total value of all associated benefits.