So you want to write off a staff party. Well we have good news!
As a business the Canada Revenue Agency (CRA) allows employers to provide up to six parties to be held for their employees throughout the company’s fiscal year and the cost is fully deductible, unlike the regular meals & entertainment which is normally limited to 50%.
In order to meet the requirements to deduct the full value of the parties you must invite ALL employees to the function. All employees’ means anyone on your payroll, excluding sub-contractors. If you happen to have offices in a number of different cities or towns under the same company you are able to deduct up to six parties per location.
While the company can deduct the full cost of the parties, the CRA also requires that if the cost per employee is above $100 per party then the portion above $100 would be considered a taxable benefit and must be included on the employee’s T4 slip at the end of the year. The total cost will include all food, beverage, transportation and any accommodation if provided.
If you have any questions or concerns related to this issue please contact Moeller Matthews to discuss and ask for one of our chartered professional accountants!