Most employee gifts are taxable. Small, occasional, tangible items may be excluded as de minimis.

Cash or cash equivalents such as gift cards are taxable.

Special limits apply for qualified length‑of‑service and safety awards.

De minimis gifts: small, occasional, impractical to account for. No set IRS dollar cap; practicality and frequency matter.[1]

Always taxable: cash and cash equivalents including gift cards, frequent or high‑value gifts.

Achievement awards: tangible property only, with annual limits when plan rules are met.[1]

Occasional snacks, coffee, or donuts

Small holiday gifts

Flowers or fruit baskets for special occasions

Company swag such as t‑shirts, mugs, or pens

Tickets to entertainment events when occasional

Cash and cash equivalents such as gift cards, gift certificates, and prepaid cards

High‑value items that exceed de minimis thresholds

Frequent or regular gifts that lose de minimis status

Qualified plan awards: up to $1,600 per employee per year if plan is written, nondiscriminatory, and the award is tangible personal property.[1]

Non‑qualified plan awards: up to $400 per employee per year for tangible personal property

Not eligible: cash or gift cards

Include fair market value in W‑2 Box 1

Withhold applicable federal income tax, Social Security, and Medicare taxes

Report and pay employer‑side payroll taxes

Holiday gifts: A small turkey or ham is typically de minimis. A $100 gift card is taxable.

Employee birthdays: A shared office cake is de minimis. An occasional $25 tangible gift is typically de minimis. Cash‑based or higher‑value items are taxable.

Work anniversaries: Tangible gifts can be tax‑free under qualified plan rules up to $1,600. Cash or gift cards are always taxable.

Performance bonuses: All bonuses, cash or non‑cash, are taxable compensation.

De minimis benefits under IRC §132(a)(4) exclude occasional, low‑value tangible gifts from payroll taxes. Common internal guardrails are $50–$100 per gift, but IRS sets no dollar amount. Consult your tax advisor.

Not de minimis: cash and cash equivalents such as gift cards or brand vouchers, vacation, meals, lodging, season tickets, or securities.

Achievement awards annual limits: up to $1,600 for qualified plan awards and up to $400 for non‑qualified, tangible property only.

Some companies “gross up” taxable gifts via payroll so take‑home remains intact; others report and withhold normally.

References: Fringe Benefit Guide – IRS • IRS De Minimis Fringe Benefits

Trivial benefits exemption typically applies when: £50 or less, not cash or a cash voucher, not contractual or a reward for services. Special £300 annual cap for directors or office‑holders and their households.

If criteria are exceeded, employers typically report to HMRC via P11D or PSA.

Reference: HMRC manual

If recipients receive Snappy Dining Cards, for U.S. payroll and income tax purposes, these are treated as cash or cash‑equivalent gift cards.

As cash equivalents, they are not de minimis and are taxable compensation. Include fair market value in wages on Form W‑2 and apply applicable withholdings.

How do taxes impact employee gifts? US teams often use the IRS references above. UK teams follow HMRC trivial benefits rules.

How do companies send higher‑value gifts without spot bonuses? Some gross up the taxable value through payroll. Others report the value and withhold as usual.

Are Experiences or brand vouchers tax‑free? In the US, vouchers are generally treated as cash equivalents and thus taxable. International treatment varies; follow local finance guidance.

Keep gifts small, occasional, and tangible to maximize chances of de minimis treatment.

When in doubt, assume a gift is taxable and report it properly.

Coordinate with payroll or a tax advisor on reporting and withholding.