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The Back Office Guide to Budgeting for a Holiday Party

Depending on your perspective, the annual holiday party is a much-loved or much-loathed office tradition. They can range from the mundane to the insane and can help you to get to know your colleagues in a whole new way (sometimes more than you wanted to).

But holiday parties can be costly. A number of companies stopped having holiday parties after the recession because of financial constraints. That's why it's important for your planning committee (even if it's a committee of one) to create a budget.

Here are six ways to keep costs under control when planning a holiday office party.

Choose a Less Popular Date

As anyone who's eaten out knows, dinners are usually more expensive than lunches. That's one explanation for why the 2015 ERC Holiday Practices Survey shows that 52 percent of companies hold lunchtime holiday parties, usually during the week. Overall, Friday is the most popular day for the holiday party, with December 18 being the most popular date. If you want to save money, follow the lead of pennywise companies that hold their party after the holidays.

Hold The Party at the Office

One of the advantages of holding your party at work is that you don't have to pay extra for a venue, though you will have to budget for decorations. The downside is it can be hard to ignore work and get in the party spirit if you're still in the office. Around 43 percent of companies have their parties off-site. A nearby restaurant is one option for a lunchtime party and it will likely already look festive.

Arrange a Fixed Rate on Food

If you're going offsite, then arranging a set menu in advance at a fixed rate per head is the best way to keep costs under control. You'll need to think about people with special dietary requirements, too. Even if you're staying in the office, catering is a must, and it's something that 62 percent of companies do, according to ERC.

Keep Consumption Under Control

A big decision is whether or not you're going to serve alcohol. Keeping consumption under control is not only responsible, but it keeps costs manageable too. Only 43 percent of companies serve alcohol at holiday parties and about half of those limit consumption, often by distributing limited numbers of drink tickets. If you're not getting a package deal from a venue, consider getting drinks wholesale to save on this budget item.

Have a Gift-Giving Raffle

While some companies never give gifts to employees, most do. These can range from a ham or turkey to cash, gift cards or small tokens. Having a raffle for a few gifts instead of getting a gift for everyone can save hundred or even thousands of dollars. Don't forget to budget for gift wrapping, too.

Keep Entertainment in Mind Early

Providing food, drink and gifts will be enough for most people, but if you're going to do something different, expect to spend more. For example, if you hire a DJ, it can cost anywhere from a couple of hundred to a couple of thousand dollars. If you really want entertainment, but are on a tight budget, consider asking a talented friend or trading services instead of cash.

How much will the average holiday party cost? Sure Payroll says the average budget per head is $75, which means if you have 100 employees it will set you back around $7,500. You can use this calculator to work out your actual costs as you get quotes from vendors and suppliers.

There is one piece of good news: your holiday party may be tax deductible, especially if you invite employees only. Check out IRS publication 463 to see if your party qualifies.


Sharon Hurley Hall is a professional freelance writer and blogger. Her career has spanned more than 20 years, including stints as a journalist, academic writer, university lecturer and ghost writer. Connect with Sharon on her website and Twitter.

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