The cost can be exempt as an exempt property benefit or an exempt minor benefit.

Exempt Property Benefits

• Costs like food and drinks for
  employees as part of a Christmas party, provided on a working day on business
  premises and consumed by current employees of that business.

Exempt Minor Benefits

Rule can apply when the property benefits exemption doesn't apply, because the party is held at a restaurant or separate
venue.

• Cost per employee must be less
  than $300 (GST inclusive)
• Associates of employees such as
  spouses and children are regarded as employees (hence the limit for an employee
  and partner would be $300 each)

Gifts are also considered separately from the Christmas party, so provided the cost of a gift and the party are each less
than $300, then both would be exempt from FBT.

The minor benefits threshold of less than $300 applies to each benefit provided, not to the total value of all associated
benefits.