The festive season is almost here – just this weekend coming back from a few days in Melbourne, I noticed Christmas trees already up in the airport! So now seems as good a time as any to start talking about Christmas parties, team gifts and end-of year shutdowns. A little business Christmas preparation can save you stress, ensure compliance, and help you start the new year fresh and organised.
At Blackwood Bookkeeping Solutions, we know the lead-up to Christmas can be hectic. Below, we’re outlined a few key areas to review so you can close out the year with confidence.
Review Business Shutdown Periods
If your business closes over Christmas and New Year, make sure you understand your obligations around directing your team to take leave.
Check the relevant Award or enterprise agreement, as many require notice of up to four weeks for an annual shut down. Some Awards allow employers to direct team members to take leave, others do not!
If any employee doesn’t have enough annual leave accrued, you can:
- Agree to allow annual leave in advance (noting that it can’t be recovered if the team member leaves before it’s earned back).
- Offer unpaid leave by mutual agreement.
- Be aware that if a team member chooses not to take unpaid leave and you can’t direct them otherwise, they may still need to be paid their ordinary rate during the closure.
Taking time now to confirm these details will help avoid confusion or payroll errors over the holiday period.
Understand Public Holidays and Leave Entitlements
Public holidays can be tricky to manage over Christmas. Here’s what you need to remember:
- Team members on paid annual leave are still entitled to payment for public holidays that fall on days they’d normally work – these days don’t deduct from their leave balance.
- Team members on unpaid leave are not entitled to payment for public holidays that fall during their leave.
- If a team member becomes ill during leave, they may be able to convert those days to personal/carer’s leave (if they have leave available).
It’s worth checking your Award or agreement for any specific exceptions before finalising December and January payroll.
Planning Christmas Bonuses
If you’re rewarding your team with a Christmas bonus, great! Just make sure it’s processed correctly.
Monetary bonuses must be processed through payroll to include PAYG withholding, superannuation and STP reporting. The same applies to gift cards that can be redeemed for cash – the ATO considers these equivalent to a monetary bonus.
Gifts for Your Team and Clients
It’s not uncommon to give small gifts at Christmas, whether to your team, your clients or your suppliers. The tax treatment depends on several factors, including:
- Who the gift is given to (team member or client).
- Whether it constitutes entertainment (eg. tickets).
- The value of the gift (typically under or over $300 including GST).
- How frequently gifts are provided (is it a one-off at Christmas or more frequent).
A non-entertainment gift, such as a hamper, bottle of wine, or a massage voucher) under $300 may quality for the minor benefits exemption from Fringe Benefits Tax (FBT).
An entertainment gift, such as movie tickets or a restaurant meal, may have different tax treatment.
Gifts to clients are generally not subject to FBT, and their deductibility and GST claimability could depend on whether they’re entertainment or non-entertainment.
FBT is a specialised area outside the scope of bookkeeping. The information here is general and intended to help you start a conversation with your tax agent to confirm how your Christmas spending should be treating for FBT, tax and reporting purposes.
Hosting a Christmas Party
If you’re planning an end-of-year celebration, it’s worth noting a few things before you pop the champagne.
The ATO distinguishes between parties held on business premises versus external venues, and between team members and clients in attendance. Factors like cost per head, venue, and guest type can all influence how the event is treated for FBT, income tax, and GST purposes.
While the details can get technical, your accountant can advise on the correct classification.
Review Rosters and Payroll Deadlines
December often calls for early payroll processing. Plan payroll early to avoid disruption. Also check:
- Leave requests are approved and rostered in advance.
- Final pay dates align with closure periods.
Think Beyond Payroll – Other Year-End Considerations
The Christmas period is also a great time to review broader aspects of your business, such as:
- Cash flow forecasting over the holiday period – particularly if clients shut down and income pauses.
- Supplier payments and invoicing before offices close.
- Team member recognition and wellbeing – acknowledging effort helps boost morale heading into the new year.
- Cyber security and system backups before shutting down the office.
Wrapping Up
December can be one of the busiest months of the year for small business owners – but it’s also an opportunity to pause, prepare and plan ahead.
By taking time for thoughtful business Christmas preparation, you can finish the year on a high note, knowing your books, payroll and team matters are in order – and start the new year with clarity and confidence.
At Blackwood Bookkeeping Solutions, we’re here to support your business every step of the way. Whether you need help preparing payroll, reconciling accounts, or simply making sure everything is recorded correctly, reach out to our team before you sign off for the holidays.
Book a discovery call with Sarah
Take the First Step Towards Financial Clarity and Confidence
We’re here to help you streamline your financial operations and eradicate financial stress.
Get Personalised Support
Book a private session with Sarah for a deep dive into your Xero file. Together, we’ll uncover opportunities to optimise your cash flow, boost efficiency, and fuel your business growth.
Let’s work together to simplify your finances and elevate your business!
