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Write Off Your Company Picnic and Treat Your Employees

The company picnic is a great way to show employees you appreciate them. It builds team spirit for your staff. And another recommendation for a company picnic is that the food and entertainment costs are completely tax deductible.

Company Picnic Exempt from 2017 Tax Changes

The Tax Cut and Jobs Act of 2017 eliminated the 50-percent deduction for entertainment. That meant you could no longer play golf directly before or after a business meeting and write off half the cost. Likewise, the 50-percent meal deduction is slated for the chopping block in 2025. (Though pandemic-relief measures have temporarily raised the deduction to 100 percent for 2021 and 2022 to help restaurants recover some of their lost revenue.)

But you can expense all the costs of that morale-raising institution, the company picnic. Covered costs include venue rental, and food and beverages. And the IRS won’t charge tax on the fringe benefit for your employees, either.

An Important Rule

In order to qualify for the 100-percent deduction, you must invite all your employees (not just the company bigwigs). The deduction covers employees’ families, but not your friends who crash the party.

Not Just Summer Fun

By the way, the same exemption applies to holiday parties, too. The eggnog and Christmas goose are deductible expenses. Small gifts to your employees are deductible, too, but the emphasis is small. Gifts must be under $25 to be fully expensed. If you get generous, gifts over $25 will be taxable compensation for employees. Note that employees have to pay tax on cash gifts or gift cards, though.

Recreational and social gatherings are tax-deductible, too. Take the gang bowling! Just remember to invite everyone.

It’s Been a Tough Year

Firing up the grill and passing around the pop-top cans can go a long way toward boosting morale. Why not take advantage of the upcoming Labor Day holiday to show the team a good time?


These handy tips offer a blueprint for planning a successful picnic.

Is that management retreat deductible? Find out here.

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