The Toffees have shown signs of recovery since Allardyce took over last month, winning three and drawing one of their last four matches in all competitions.
Despite the upturn in fortunes, however, the new man in charge at Goodison Park is unwilling to let his players celebrate unless their current form continues into the New Year.
Asked why he had stepped in to cancel next week's bash, which was pencilled in for after the Swansea City match, Allardyce told reporters: "It is not needed at the moment and because of the position we were in when I first arrived here.
"I told the players I will pay them back when they come out of Christmas and into January in a better position. They can go and socialise at the right time. As a manager it was very important that the players, in today's environment with social media, were not seen to be out enjoying themselves too much.
"They have turned things around already for me but [the festive schedule] is our biggest demand. It is probably not overall because a lot has been demanded already with their season starting in July with Europe, and the injuries. A lot has been demanded of the players and Christmas will be the same.
"The party is off until there is a period of time when we are in a very good position and I can tell the lads they can have the relaxing time that they deserve. But whatever they do I don't want a phone call telling me they've been in trouble or they will be in even more trouble with me."
Everton held Liverpool to a 1-1 draw at Anfield last time out and return to action on Wednesday night with a trip to Newcastle United.