By Caro
Do you want to give your employees a gift and thank them for their commitment? In some cases, the tax office will even accommodate you. Employee gifts are tax-free under certain conditions. In this article you will find out what you need to consider when giving gifts, what the maximum limit is for employee gifts and what tips and tricks you can use to make your employees and yourself happy.
Disclaimer: We at Theyo are not tax experts and cannot guarantee the accuracy, timeliness and completeness of the information in this article. If in doubt, always seek help from tax advisors.
When are employee gifts tax-free and what does that actually mean?
Tax-free means tax deductible. In other words: Under certain conditions, you can deduct employee gifts from your taxes as business expenses. In order for this to work, as with all tax and financial issues: Document your expenses well, including for gifts, and keep the relevant receipts. It's best to carefully note down the reason for the gift. This way you have all the information at hand when it's time to file your tax return.
A gift is not just a gift
Now let’s get down to business! To ensure that employee gifts are tax-free for you, there are various points to consider. Because a gift is not just a gift. Rule number 1: Cash gifts are generally not tax deductible. The tax-free regulation only applies to gifts in kind, such as cups, gift baskets or, of course, chocolate . ;-) An exception is the coverage of monthly tickets or fuel costs - more on that in a moment. Rule number 2: There is a limit to how much you can let the employee gift cost you. We are now reaching this maximum limit.
50 or 60 euros – what is the maximum limit?
When it comes to tax-free gifts, there are two main limits: 50 and 60 euros. But which amount is correct? In fact, both are true. However, they apply to two different types of gifts.
- Gifts for special occasions: If you want to make your employee happy on her birthday , wedding or farewell, you should choose a gift with a maximum value of 60 euros. This maximum limit applies if you give individual employee gifts on special occasions. But be careful: Christmas presents do not fall into this category!
- Gifts without a special occasion: The maximum limit of 50 euros applies to gifts outside of birthdays, weddings, etc. 50 Euros? You heard right! Since the beginning of 2023, the amount has been increased from 44 euros to 50 euros . Such gifts for employees include Christmas presents, but also vouchers for the gym or monthly public transport tickets. A monthly chocolate subscription would also be quite conceivable. ;) That's right, you can give your employees gifts worth up to 50 euros every month! By the way, gifts for special occasions remain unaffected - you can give these as additional gifts. And so that there are no misunderstandings: employee gifts without special occasions do not have to be given monthly, but can also be given irregularly or once. How about, for example, a littlegift after the summer holidays or an Advent gift ? By the way: Tax-free employee gifts can be used as a nice bonus to your regular salary.
Would it be a little more expensive?
Of course, you can also give your employees gifts that are more expensive than 50 or 60 euros. In this case, however, the gifts are not tax-free, which means that you and, if necessary, your employees must pay tax on them. In this case, you might have the option of taxing the gifts at a flat rate in order to reduce the burden on the recipient. The same applies here: Get tips from tax professionals to be on the safe side.
Long story short: Tax-free employee gifts are worth it
If you do everything right, you can sweeten your employees' work with small gifts - and at the same time benefit from the tax-free rule. So according to the motto: Happy employee, happy you! Be particularly careful not to give away money , remember the maximum limits and document receipts well. If you have any questions, get advice from professionals who can tell you exactly how you can best use the tax-free rule for your company.
Are you looking for a special gift for your employees? How about a chocolate box or a sharedvirtual chocolate tasting ? You can find more information at theyo.de :-)
FAQ on tax-free employee gifts
How much can a gift for employees be?
If you want your employee gifts to remain tax-free, you should observe two monetary limits: For gifts on special occasions, the gift must not exceed a monetary value of 60 euros. For gifts without a special reason, the cash limit of 50 euros applies.
How much are gifts tax-free?
Gifts worth up to 50 euros per month that you want to give to your employees without a special reason remain tax-free. If there is a special occasion for the gift, employee gifts are tax-free up to 60 euros.
When are gifts to employees considered business expenses?
Employee gifts are considered business expenses and are therefore deductible and tax-free if you meet the monetary limit of 50 or 60 euros.
What about gifts to business friends?
A different monetary value limit applies to gifts to business partners and customers in order to remain tax-free. This amounts to 35 euros per customer per year. In this article we explain in detail how gifts to customers and business partners can easily remain tax-free .
What limits are there on gifts to employees?
If you want your employee gifts to remain tax-free, you should pay attention to the limit of 50 or 60 euros.
