The holidays are upon us, and many are excited to get back to social gatherings this year. Whether you’re hosting a staff holiday party, or a holiday dinner for your clients, here’s a list of six items to consider when creating your budget for the perfect get-together.
1. Guest list
The first step to creating your holiday gathering budget is to determine the guest list, as the number of guests will be a key driver of costs. Is the event geared towards staff? Clients? Do you wish to extend the invitation to include plus-ones for your guests? Once you have a picture of how many will be included in your group, you can begin to look at venues.
Choosing the venue is key to setting the correct tone for your event. The easiest option for many will be to choose a restaurant or event space that will handle the majority of the details for you, including food, drinks, staff, decor and music. However, it can also be more cost-effective to find a venue that is more of a “blank slate” and coordinate bringing in each element yourself; you could even host the event at your office or workplace. That said, it can be much more work to plan and organize.
When selecting the venue, we also suggest inquiring about how their pricing changes depending on time of day and day of the week. Many venues will charge a higher fee or minimum spend for weekends, whereas weekdays can be a more cost-effective option. You may also find better deals for hosting a lunch or cocktail party, as opposed to a seated dinner.
Depending on the venue, the menu is an area that will likely give you a lot of flexibility in terms of the structure of your party. For larger dinners, you may opt to start with a cocktail hour and include passed canapés or hors d’oeuvres platters. For a sit-down meal, you will want to consider how many courses to serve and what options you’d like to give your guests.
When you are creating your budget, always ensure that you are factoring in tipping costs for the service staff. For many functions for larger parties, the catering team or restaurant will likely have a pre-arranged gratuity percentage that is added on top of your food and beverage costs. If this is not automatically included, we suggest factoring in a gratuity of at least 18%.
For many parties, guests will likely make their own arrangements for arriving at the event. However, if your event has an open bar, it is recommended that you, as the host, assist your guests in getting home safely. The easiest way to do this is to make arrangements with a taxi or ride-sharing company in advance, and provide vouchers to your guests so that they have a safe ride home. While important, this can be an often-overlooked cost.
6. Deductibility for tax purposes
For the most part, your holiday entertainment expenses are 50% deductible, as are most meal & entertainment expenses. However, if you are hosting a staff party to which all of your staff have been invited, the event is 100% deductible (note that this is limited to six events per year). You can also fully deduct your transportation costs.
We wish you joy and laughter for your holiday hosting this year,
and wish you a safe and happy holiday season.
Article written by Carly Matheson, CPA