Employee Gifts: The Thought That Counts
Holidays. Employee birthdays. Company milestones. Over the course of the year—and especially at the end of it—gift exchanges at the office are a common practice. Employee gifts can significantly boost morale when done right. Dive into our comprehensive guide to ensure every gift fosters a positive work environment.
For business owners and managers, the adage that it’s better to give than to receive is spot on: Giving gifts to staff lifts morale, increases their motivation to perform, and in general, builds a healthy company culture…that is, when it’s handled correctly.
It’s always important to remember you’re in a business setting and if you’re not mindful of your company’s policies and principles, your office gift can turn into an office gaffe!
So, what is appropriate and what is prohibited? Let’s get into it:
Employee Gifts should flow down the supervisory line.
This is the no apple for the teacher clause! The rationale is that it protects employees from ever feeling pressure to buy something for the boss. On the other side, companies need to discourage any situation where a superior might feel obligated to respond with favoritism.
Gift one, gift all.
Remember the elementary school Valentine’s Day rule? If you’re giving out one card in class, then every kid should get one. Same rule applies in the office. If you’re gifting to a team, never leave anyone out. And make sure each gift has comparable value.
Other Don’ts:
- Don’t exceed any prescribed set amounts.
- Don’t get too personal (e.g., jewelry and perfume).
- Be careful about alcohol: Many abstain because of health or religious reasons.
- Don’t hand out thoughtless gifts (e.g., convenience store candy).
- Don’t pressure fellow team members to contribute to group gifts.
- Avoid donations to controversial charities.
- Don’t treat company swag as the gift. (Don’t be that boss.)
Suitable gifts include:
- Flowers and plants
- Food and wine (if no religious sensitivities)
- Event tickets
- Meals
- Books
- Travel vouchers
- Electronic gadgets (e.g., noise-canceling headphones)
- Picture frames
- Desk accessories (e.g., paperweights, calendars, monogrammed mugs)
- Gift cards — ideally matched to employees’ individual interests.
And remember that wrapping paper and a note adds a personal touch. Also, let the recipient know it is unnecessary to open it on the spot.
What about taxes?
Donors can take tax deductions for their gifts. Be careful, though, that your generosity does not end up making an employee liable for declaring or paying tax. Any gift, from a bonus to a gift card, counts as income.
That said, even the hard-hearted IRS has carved out some exceptions: If the gift is of little monetary value, it is classified as a “de minimis fringe benefit.” Alternatively, an award of less than $400 for outstanding work can also escape the tax net, but the rules are complex and rigid, so we advise you consult a qualified tax adviser about the tax implications of any gift.
Of course, the complexities of HR go far beyond gift-giving! If you have any general question about human capital management (HCM), contact Accu Data today. We’re happy to walk you through any concerns you have!