An Employer’s Guide to Giving Gifts to Their Employees
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Giving Gifts to Employees: Here’s What You Should Know
It’s nice to be recognized for your hard work. Business owners know this, and that’s why it’s a common practice to give gifts to their employees. It boosts company morale by letting your employees know they are appreciated.
But gifts from an employer have certain taxation rules that apply, which is why it’s important to understand these rules to avoid any unnecessary trouble.
Let’s dive into everything you should know about giving gifts to your employees.
What Constitutes Gifts, Awards, and Rewards to Employees
While these might sound like the same thing, the Canada Revenue Agency (CRA) has distinct definitions of each of these types of presents.
When Are Gifts Taxable?
Now that we understand the types of gifts that employees receive, we can get into how the taxes work.
Because presents come from an employer, employee gifts can be taxed as part of their regular income. But this doesn’t happen in all scenarios.
The CRA outlines criteria for non-taxable gifts. In order for a present to not be taxed as part of the employee’s income, the present must:
How Professional Accountants Can Help with Employer Gifts
Accountants are your taxation experts. They understand the ins and outs of the CRA; it’s their job to keep track of those rules and regulations.
If you’d like further help understanding how employer-given gifts are taxed, we can help. Contact us today and get the expertise you need.
- Gifts: These are given on special occasions such as religious holidays, birthdays, weddings, or the birth of a child.
- Awards: These are given based on an employee’s accomplishment, specifically related to the overall workplace.
- Rewards: These are given for any reason other than those listed for gifts and awards, such as those relating to job performance.
- Cash:
- Currency or its equivalent
- Cheques
- Near-Cash:
- Gift cards/certificates
- Bonds
- Precious metals
- Digital currency
- Non-Cash Gifts:
- Anything that is not cash nor near-cash, such as tickets to a hockey game

- Be a non-cash gift, and/or an award
- Not exceed a combined value of $500 (can be an unlimited number of non-cash gifts and awards)
- Note that this does not include small items of trivial value such as coffee mugs
- Nor does it include service awards for employees
- Be a gift (given for a special occasion) or an award (for recognition of overall workplace contribution)
- Not be a reward
