Is our staff party or gift taxed?
A party under £150 a head and gifts under £50 are tax-free. Go a penny over and all of it is taxed.
Your answer
Enter the cost to see whether it's taxed.
About this calculator
For employers planning a Christmas party, a summer event or gifts for staff.
What happens to your answers
We don’t keep them. Your answers go to our server to do the sums and aren’t stored or logged. If you copy a link to your answers, they’re in the link itself, so only share it with people you trust.
How it’s worked out
A yearly party open to all staff is tax-free if all your events in the year cost £150 a head or less, including VAT, travel and hotels. A gift is tax-free if it costs £50 or less, isn't cash and isn't a reward for work. If you go over, the usual fix is to pay the staff's tax for them, through a PAYE Settlement Agreement.
Worked example
Your party is taxable because it costs £160.00 a head, over the £150 limit. Paying the tax for your staff would cost about £1,750.
2026/27 tax year · 25 staff · tax paid for staff at the basic rate
| Cost a head, all events this year (with VAT, travel and hotels) | £160.00 |
|---|---|
| Tax-free limit a head, for events open to all staff | £150 |
| Tax you'd pay for each person (20%, grossed up) | £40.00 |
| Employer's National Insurance on it (15%) | £30.00 |
| Extra cost for 25 staff | £1,750 |
Worked out using HMRC's published rates for the 2026/27 tax year (6 April 2026 to 5 April 2027), on a yearly basis.
Questions people ask
Is it £150 of each person's cost or an allowance?
It's a limit. If the cost is £150.01 a head, the whole amount is taxable, not just the penny over.
Do partners count?
Yes. Divide the total cost by everyone who attends, guests included.
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