Tis the season for Christmas parties, gift-giving, end-of-year gratitude, and maybe even a few crackers pulled around the boardroom table. But before you get fully swept up in the festivities, it’s worth giving your tax obligations a quick once-over.
To help you stay compliant (and keep the Grinch away from your balance sheet), here are five essential tax tips every New Zealand business should know heading into the holiday season.
1. Christmas Parties – What You Can Deduct
Whether you’re celebrating on-site or at a festive venue, entertainment expenses such as food, drink, and venue hire are 50% deductible.
Transporting staff — like hiring a bus — is also 50% deductible.
Rogers &Co Tip: Keep clear and detailed expense records. Santa checks his list twice, and you should too.
2. Gifts for Employees – Know Your FBT Thresholds
Non-cash gifts like vouchers, hampers, or gift baskets may trigger Fringe Benefit Tax (FBT) unless they fall under the de minimis exemption:
- Under $300 per employee per quarter, and
- Under $22,500 total per year across the team
- Cash bonuses, however, are treated as income and must go through payroll with PAYE.
Rogers &Co Tip: Stick to non-cash gifts within the exemption to avoid unnecessary FBT.
3. Client Gifts – Deductible & Delightful
Want to thank clients for their support this year?
- Food and drink gifts: 50% deductible
- Non-food gifts: fully deductible if business-related
Rogers &Co Tip: Personalised client gifts add impact and stay tax-smart.
4. Company Vehicles – Don’t Forget the FBT
If a company vehicle is available for personal use over the holiday break, FBT applies.
The liability can be reduced if employees contribute toward fuel or provide receipts for running costs.
Rogers &Co Tip: Encourage staff to keep mileage logs and petrol receipts — it’ll make your calculations smoother than Santa’s runway.
5. Holiday Close-Downs & Staff Leave – A Quick Payroll Check
If your business shuts down over Christmas/New Year, make sure your payroll settings are correct for:
- Annual leave loading
- Alternative holidays
- Public holidays worked vs. observed
- Closedown periods under the Holidays Act
This helps ensure staff are paid correctly — and avoids messy corrections in January.
Rogers &Co Tip: Double-check payroll classifications before your team heads for the beach.
Wrapping Up
With a little planning, you can enjoy the holiday season while keeping your tax obligations tidy. If you’ve got questions about FBT, entertainment deductibility, client gifting, or payroll over the break, the team at Rodgers & Co is only a phone call away.
Here’s to a joyful holiday season and a prosperous 2026 — may your business shine as brightly as Rudolph’s nose.
Merry Christmas and Happy Holidays from Rodgers & Co!
Frequently Asked Questions About Holiday Season Tax Obligations
Yes. Most Christmas party costs — including food, drinks, catering, and venue hire — are 50% tax deductible in New Zealand. This applies whether you host the party onsite or offsite.
2. Do employee Christmas gifts attract Fringe Benefit Tax (FBT)?
They can. Non-cash gifts (like vouchers, hampers, or gift baskets) may be subject to FBT unless they fall under the de minimis exemption: under $300 per employee per quarter and under $22,500 per year for the whole team.
Cash bonuses always attract PAYE.
It depends on the gift. Food and drink gifts (such as wine or Christmas treats) are 50% deductible, while non-food gifts that are business-related (like branded merchandise or appreciation gifts) are generally fully deductible.
Yes. If a company vehicle is available for personal use during the holiday break, FBT applies. You can reduce the calculation if employees contribute to fuel or provide receipts.
Before shutting down, make sure payroll settings are correct for:
- Annual leave entitlements
- Public holidays (worked vs observed)
- Alternative holidays
- Closedown periods under the Holidays Act
Correct setup helps avoid payroll errors in January.
