Updated December 2021
The Christmas lights and decorations are going up in our city precincts, the shopping centres are playing Christmas carols on an endless loop and we’re being constantly reminded of how many shopping days remain until Christmas – the festive season is once again (nearly) upon us!
The annual Work Christmas Party is usually a much-anticipated social event and likely to be even more so this festive season, after what has truly been a difficult and challenging year for both employers and employees alike. It’s an opportunity for employers to thank their staff for their great efforts and to join with them in letting their hair down a little.
If this is your first time throwing a Christmas celebration for your team, you may not be certain of your obligations and responsibilities when staging Christmas or New Year functions, whether they take place at your workplace or at an outside venue. For those of you who have staged such events previously, it’s a good idea to review your practices to ensure you are meeting your obligations.
COVID 19 Safe Celebrations
All employers need to keep in mind that some level of COVID restrictions may still be in place throughout the country.
It is still possible to put on a great celebration for your team, so long as you plan your event carefully and ensure you are aware of any rules and regulations that are in force in your locality.
Virtual Party
If you are being particularly cautious, you could consider a Virtual Party. This will require some advance planning and resourcefulness if it’s to be entertaining for your team and not just another dreary online hook-up they are obliged to be part of.
Search online and you will find many great ideas for making such an event fun and engaging – cocktail making or Christmas cupcake decorating competitions are just a few.
Outside Venue
If you’re not sold on the idea of a Virtual Party, but have concerns about the possible risks of holding the Christmas party at a restaurant or other indoor venue – why not opt for an outdoor location?
As the chance of enjoying a White Christmas here in Australia is practically nil, take advantage of our generally sunny skies and consider a barbeque, a picnic or a catered event at a park, a winery, by the river or at the beach. Be sure to investigate any licences or permits that may be required.
Outdoor venues also provide a great opportunity to incorporate fun games and activities into the festivities. Not only do these keep the team entertained but can be a useful team building exercise.
Indoor Locations
You may feel a restaurant, café or other indoor venue will hit the mark with your team. Great – you know your team better than anyone. We’re fortunate here in WA that these type of venues are still possible, despite COVID.
Just do some due diligence before booking. Make sure you choose somewhere that has completed a COVID Safety Plan and adheres to all relevant COVID Safety Guidelines.
Information for food businesses and licensed premises operating In WA, can be at: https://www.healthdirect.gov.au/covid19-restriction-checker/cafes-and-restaurants/wa
Make sure your team knows in advance, they will be required to comply with any directions given by venue operators or staff in relation to COVID Guidelines
Onsite Event
You may decide to hold the Christmas Party onsite, at your workplace.
As an employer, you must assess whether your workplace is able to satisfy any prevailing Covid-19 guidelines and then monitor throughout the function.
For more information see: https://www.commerce.wa.gov.au/worksafe/covid-19-coronavirus-frequently-asked-questions
Your Duty Of Care
As an employer, you need to consider the workplace health and safety responsibilities that apply in your particular State.
In Western Australia, Section 19 of the Occupational Safety and Health Act 1984 sets out the primary duty of care that an employer has to its employees. This duty extends to work related events, including the annual Christmas Party.
As an employer, you are required to take reasonable steps to ensure the safety of your employees.
What does this mean in practice?
Here are some useful tips:
- Make sure the venue is safe
- Ensure the responsible service of alcohol, and provide alternatives – ample drinking water and soft drinks
- Ensure there is sufficient food available – you need to consider the scale of the party, the amount of available alcohol and ensure the level of food provided is adequate
- Team managers or leaders should be tasked to supervise the party, and make sure they have sufficient support to deal appropriately with any issues that may arise
- Ensure your staff get home safely after the event
- If you receive any complaints arising from behaviour at the Christmas party, as an employer you must make sure all complaints are dealt with – you cannot simply ignore them
- General Code of Conduct in the Workplace
- Workplace Health and Safety
- Sexual Harassment
- Discrimination
- Bullying
- Consumption of Alcohol, Use of Drugs
Tax Considerations
We can’t forget the tax implications of staging your annual Christmas party for your workers.
There are 3 questions to consider:
- Will you get a tax deduction for the costs incurred on the Christmas party?
- Can you claim any GST you may have paid on those costs?
- Have you provided ‘Fringe Benefits’ and will you have to pay Fringe Benefits Tax (FBT)?
Tax Deductible? GST Credits? FBT Payable?
In brief, and assuming you are not a tax-exempt organisation and not using what is known as the 50-50 split method for meal entertainment, the consequences are as follows:
Employees and Associates (e.g. Spouses, Children)
- If you hold the party on your work premises on a working day where food and beverage are consumed by current employees (not associates), the cost will be FBT exempt
- If the event is held offsite, employees and associates attend, and the cost of the event for the employee and their associate is less than $300*, this too will be FBT exempt (the threshold of less than $300 applies to each benefit provided, not the total value of all associated benefits)
- You may also decide to present your team with gifts, which are treated separately. Again, if the value is less than $300, these are generally FBT exempt. Caution is needed if you make a gift in ‘cash’ – these will be treated as taxable wages
- If the expenses are FBT exempt, then the cost is not tax deductible, and you will be unable to claim any GST credits
- If the cost of the party exceeds $300 per employee, then FBT is payable. The expense would then be tax deductible, and GST credits can be claimed
* Note: Benefits costing less than $300 are FBT exempt as ‘minor benefits’, provided certain conditions are met.
Clients and Contractors etc
- Where clients or contractors attend the Christmas party, the costs do not attract FBT, are not tax deductible and GST credits cannot be claimed
FBT rules can be extremely complex, and the above is provided as a general guide only.
For additional information on how FBT may apply to your situation, contact us, or refer to ATO guidance:
https://www.ato.gov.au/general/fringe-benefits-tax-(fbt)/in-detail/fbt-and-christmas-parties/
So now there’s only one thing left to do – enjoy your annual Work Christmas Party with your team and stay safe.
