As the year comes to a close, many employers will be looking for ways to acknowledge the hard work of their employees. Where the cashflow doesn’t quite allow for a cash bonus, you might want to consider gift cards or vouchers.
Choosing the best one, though, can be tricky. There are a lot out there. Also, it’s a good idea to make sure you’ve done your due diligence before committing. As SmartCompany has recently reported, the holiday season is a ripe time for scams.
The gift cards
While Coles and Woolworths gift cards are a popular choice, with numerous outlets accepting them, there’s plenty of other options to consider. Here are a few ideas to get you thinking:
Has your business had a particularly stressful year? While a bottle of wine is an easy option, your employees will likely get much more out of some indulgent relaxation – it’s the kind of thing they often don’t splash out on for themselves.
Pounding the retail pavement and juggling family gatherings over the holidays is an adventure in itself, but some might get more from jumping out of a plane or going on a trail ride. Many “adventure” retailers offer gift cards, which will enable your employees to choose from a host of experiences.
Music, books, games vouchers – depending on the staff member these vouchers can offer some essential downtime so your employees are re-energised for the new year.
While dining can be classed as an entertainment expense (see below) you can get around this by buying a gift card. Many providers offer gift cards that cover multiple popular restaurants with the one card.
Make your gifts tax deductible
While you might want to really splash out on your employees this year, it’s worth being mindful of what you can claim tax on, and where you are liable for fringe benefits tax.
According to the ATO, “The provision of a gift to an employee at Christmas time may be a minor benefit that is an exempt benefit where the value of the gift is less than $300.”
This means that if your gift is less than $300 inclusive of GST, no FBT is payable. You can also make a tax deduction for “non-entertainment gifts”. The good news is gift vouchers fall into the non-entertainment category.
Avoid the entertainment gift
While you can still avoid FBT for entertainment gifts valued less than $300, entertainment gifts, which includes tickets to the theatre, live music, sport, holidays and membership to a club, are not tax-deductible.
Finally, make sure your gift is relevant. Each year Australians waste $70 million on unredeemed gift cards. Make sure your gift is well received.