Employee gifts – definition, benefits, types and current trends

Employee gifts have become an important strategy in many companies to show appreciation and increase employee satisfaction . But what exactly does this mean, what forms do they take, and what benefits do such gifts bring to the company? In this comprehensive article, we examine the definition and significance of employee gifts, the advantages for employers, different types of presents (from non-cash gifts to tax-free alternatives ), special occasions such as Christmas, tax frameworks, as well as current trends and study results. Finally, we demonstrate how a partner like oneConcepts can support companies with reward solutions – and why it's worth taking action now.

Definition and meaning of employee gifts

Employee gifts are voluntary gifts given by an employer to its employees, whether in the form of non-cash gifts, vouchers, bonuses, or other tokens of appreciation. Their primary purpose is to express appreciation for work performed and to recognize the personal contribution of each employee. Such gestures have a surprisingly large impact on the working atmosphere: Studies show that employer gifts bring joy to 79% of employees, boost motivation for 66%, and increase sympathy toward the employer for 61% (source: https://www.cadooz.com/contenthub/umfrageergebnisse-weihnachtsgeschenke-fuer-mitarbeiter/) . More than half of employees (56%) consider such tokens of appreciation important for employer loyalty.

The importance of gifts for employees lies primarily in their psychological effect. A well-chosen gift conveys recognition and strengthens the emotional bond between employee and company. Valued employees demonstrably feel a stronger connection to their company and are more committed to their work. This creates a principle of reciprocity : those who receive recognition give it back in the form of loyalty and performance. In times when skilled workers are in high demand, even small gestures can have a big impact – true to the motto "small gifts keep the friendship alive," small gifts keep the workforce alive .

Benefits of employee gifts for companies

Targeted employee gifts offer companies a number of tangible benefits. First of all, they promote employee motivation and increase productivity. When employees know that their extra effort is noticed and rewarded, they are more likely to continue to work hard. According to a survey, 70% of employees feel more motivated when they receive a gift from their employer - which can lead to around 15% higher productivity. At the same time, in one practical example, personalized gifts reduced the turnover rate (employee departure) by 15% within a year. This shows that such measures increase employee loyalty because employees who feel valued stay with the company longer. Companies also report fewer sick days - in one survey, the absenteeism rate fell by 20% when regular employee gifts were used.

Another benefit is employer branding : A company that visibly values its employees builds a positive image as an attractive employer. Employees who feel fairly treated also act as ambassadors for the company externally. For example, 85% of employees stated that gifts from their boss increase their job satisfaction – which is reflected in a better atmosphere within the team and even in customer service. At the same time, such appreciation initiatives appeal to potential applicants.

Companies with structured gift and reward programs experience an average 30% higher employee engagement and significantly increase their attractiveness to skilled workers. Last but not least, employee gifts can also offer tax advantages : If well planned, certain gifts can be tax-free or subject to a flat-rate tax (more on this below), making them a cost-effective investment in employee motivation.

Gifts in kind

Non-cash gifts are physical presents that range from classic promotional items to high-quality products. These include personalized pens, coffee mugs with the company logo, gift boxes with delicacies, tech gadgets, or even practical everyday helpers for the office or home office. Non-cash gifts offer the advantage of giving employees something tangible. A well-chosen gift with practical value —such as an ergonomic mouse pad, a high-quality thermos mug, or a book voucher—shows that the employer has put some thought into the product. It's important to pay attention to quality: A durable, useful product will be used again and again and will serve as a long-term reminder to the recipient of their employer's appreciation.

Personalized rewards

Personalized rewards go a step further by addressing the individuality of the employee. The gift is personalized—be it through an engraving of the name, a selection specifically tailored to the person's interests, or an acknowledgment for a special achievement. Examples include a book about an employee's hobby, custom-designed calendars with team photos, or company products with a personal dedication. Such personalized employee gifts show the individual: "You are seen as an individual, not just as an employee." This greatly strengthens the sense of belonging. Studies confirm that personalized recognition gifts have a noticeably positive impact on motivation and retention (source: https://www.fb-unternehmensberatung.de/personalisierte-mitarbeitergeschenke/# ). While the effort required for personalized rewards is somewhat higher, the emotional value —and thus the benefit to the company—also increases significantly.

Sustainable gifts

Sustainability is also playing an increasingly important role in employee gifts. Sustainable employee gifts are presents that are environmentally friendly, conserve resources, or socially acceptable. These include, for example, products made from sustainable materials (such as drinking bottles or notebooks made from recycled materials), reusable everyday items (fabric bags, coffee-to-go cups), or even tree-planting campaigns and donations to charitable projects on behalf of employees. The trend is clearly heading in this direction: Many employers today are opting for gifts that not only bring joy to the recipient but also have a positive impact on the environment. Employees – especially younger generations – appreciate it when their employer focuses on environmentally and socially acceptable gift options. Such gifts simultaneously convey the company's values and are doubly well received.

Digital gifts

In our increasingly digital working world, digital gifts are also gaining in importance. These include voucher codes for online shops, subscriptions to e-learning platforms or streaming services, digital books or music downloads, and even experience vouchers that can be redeemed online. Digital employee gifts have the advantage that they are often very flexible to use – employees can choose what they like best online. They are also particularly suitable for distributed teams or those working from home, as delivery can be easily done via email. Another advantage: many digital rewards are easy to scale and administer (there are platforms, for example, where employers can award reward points that employees can then exchange for various digital rewards). In times of remote work, digital tokens of appreciation are a practical alternative for sending a thank you to employees everywhere.

Tax-free alternatives

Not every employee gift has to be a classic gift wrapped in gift paper. Tax-free employee gifts can also be given in the form of non-cash benefits or additional services that remain below certain tax-free amounts. A typical example is the monthly non-cash benefit : up to a tax-free limit of currently €50 per month, employers can give their employees things like gift cards or reloadable prepaid credit cards tax-free and duty-free . Vouchers for specific purposes (e.g. for gyms or public transport) are also popular. Another option is additional vacation days or a paid day off for a birthday – although intangible gifts of this kind take up working time, they are not taxable and are highly valued. Gifts up to €60 for personal occasions (such as birthdays, weddings, or anniversaries) are also tax-free – so a bouquet of flowers or a gift of wine on the occasion of an anniversary can be presented without deductions. These alternatives enable companies to offer their employees real added value without incurring deductions on the next paycheck. It is important to strictly adhere to the legal requirements (more details in the section on tax regulations) so that the gift is enjoyable for both parties.

Employee gifts for Christmas

The Christmas season is a special occasion every year for employee gifts. Christmas gifts for employees are a tradition in many companies – whether as a thank you for their hard work during the year or as motivation for the coming year. At the end of the year, employers often want to express their appreciation once again, and employees appreciate a festive gift. In fact, 56% of employees consider an end-of-year gift from their boss to be an important expression of appreciation. Companies shouldn't miss this opportunity, because Christmas offers the ideal time to strengthen team spirit and say thank you .

Popular employee gifts for Christmas include vouchers , gourmet gifts , and experience presents. A survey showed that a universally redeemable voucher is at the top of employees' wish lists – 49% of respondents named the universal voucher as their favorite Christmas present. This was followed by restaurant vouchers (28%) and traditional non-cash gifts (22%). Shared experiences are also becoming more important: some companies organize special team events, excursions, or Christmas parties as gifts for employees. A joint cooking class, an escape room adventure, or a winter excursion can strengthen the sense of community and be remembered for a long time. Traditional tokens of appreciation such as a gift basket, a bottle of wine, or a personal letter from a supervisor to accompany a Christmas card often round off the package. It is important that the Christmas gift for employees comes from the heart and fits in with the company culture – then it has the greatest impact.

A clear trend is emerging: More and more companies are making Christmas gifts a regular fixture. In a recent survey, 55% of employers stated that they give their employees something every Christmas. A few years ago, the proportion of regular Christmas gift-givers was significantly lower, but many have now realized that such gestures have a direct impact on motivation, loyalty, and the working atmosphere . Over half of employees have now received at least one Christmas gift from their employer – a positive trend that shows that Christmas gifts are almost becoming standard practice in companies . After all, a successful end to the year with small gifts and a nice celebration lifts the mood and starts the new year with more motivation.

Tax advantages and legal framework

Employee gifts should bring joy – and ideally, they shouldn't impose any tax burden on either employer or employee. Therefore, it's worth knowing the legal framework for such gifts. In Germany, there are clear limits and allowances within which tax-free employee gifts are possible:

1. Tax-free benefits in kind up to €50 per month: Employers may provide each employee with monthly benefits in kind up to €50 gross without incurring income tax or social security contributions. This so-called tax-free allowance for benefits in kind (until 2021: €44, now €50) can be used for vouchers, cash cards, or other non-cash rewards, for example. It is important that this limit is not exceeded per month and employee and that it is truly a benefit in kind (not a cash payment). If the amount is exceeded by even a cent, the entire value becomes taxable – so you should plan carefully. Tip: If the monthly allowance has not yet been used up in December, it is an ideal way to use it as a Christmas present to delight employees.

2. Gifts up to €60 for personal occasions: There is also a rule that gifts for personal occasions (e.g., birthdays, weddings, births of children) up to a value of €60 remain tax-free . This exemption for personal occasions allows employers to give gifts such as flowers, books, or wine on such occasions without incurring income tax. Important: The occasion must be individual and personal; Christmas gifts do not fall under this €60 rule, but are considered general expenses.

3. Tax-free company events (Christmas party): The Christmas party itself is also tax-privileged. Two company events per employee per year (such as a Christmas party and a company outing) are tax-exempt up to a maximum of €110 per person . This amount includes all per-capita event costs (food, drinks, venue rental, entertainment, gifts, etc.). From 2024, this exemption limit is set to increase to €150. If the exemption limit is exceeded, however, the entire party is not immediately subject to tax – only the excess portion is subject to a flat rate of 25% tax. This allows employers to celebrate relatively lavishly without providing employees with a monetary benefit. A small gift presented as part of the Christmas party counts towards this €110/€150 limit.

4. Flat-rate taxation of larger gifts: If a company wants to give its employees a larger gift (e.g., a more expensive shopping voucher, electronic item, or a special payment), there is the option of flat-rate taxation under Section 37b of the Income Tax Act (EStG). This means that the employer pays the applicable tax at a flat rate (usually 30% plus solidarity surcharge and, if applicable, church tax), and the employee receives the gift gross for net. This option is suitable if you want to deliberately exceed the tax-free allowances without the employee suffering a tax disadvantage. For example, a high-quality shopping voucher worth €200 can be taxed by the employer at a flat rate of 30% – it remains tax-free and fully usable for the employee. Companies should carefully consider what is more advantageous for them: flat-rate taxation of larger gifts or several smaller, tax-free gifts spread throughout the year.

In any case, it's important not to forget the documentation . For all employee gifts, you should record the date and value of the gifts, as well as the tax exemption rules under which they fall. If in doubt, it's worth consulting a tax advisor to maximize the tax benefits —after all, you don't want the joy of the gift to be dampened by unexpected taxes later on.

Current trends and studies on employee gifts

In recent years, several trends have emerged in the area of employee gifts. Companies are increasingly recognizing the strategic value of such benefits , and studies are providing compelling figures on the impact of employee gifts .

A clear trend is the aforementioned increase in regular employee gifts , especially at Christmas. The latest surveys from 2023 show that more than half of companies now give their employees gifts every year for the holidays, and fewer and fewer employees are missing out. Regular Christmas gifts are therefore on the rise – probably also because companies have realized that they can score points with them in times of skilled labor shortages. Small gestures of appreciation are seen as an important building block for retaining employees and offering attractive working conditions. As the saying goes, "Small gifts keep the workforce engaged." Especially in the competition for talent, contemporary benefits such as employee gifts are a real asset that employers can leverage.

A change is also noticeable on the employee side: The need for appreciation is growing. Around 67% of employees see Christmas gifts from their employer primarily as a token of appreciation – 10% more than in 2020. The expectation of being at least symbolically rewarded for commitment and loyalty is therefore increasing. At the same time, many companies state in surveys that it is important to them to express their gratitude through gifts – but the implementation sometimes lags behind. There is potential here: Employers who show authentic and regular recognition can clearly differentiate themselves from less committed competitors.

In terms of gift types, trends are moving toward greater personalization and sustainability (as described above). According to a recent survey, more and more companies are placing value on personalized and environmentally friendly gifts for their employees. Reusable, sustainable products and those with a personal touch are highly sought after. Employees explicitly welcome this development because it demonstrates the employer's genuine interest in the well-being of its employees and society. Flexible rewards are also in vogue: according to surveys, universal vouchers, for example, are now the preferred gift for 75% of all respondents because they benefit both sides – the employee has freedom of choice, and the employer has minimal effort. Hybrid gifts (a combination of physical items and vouchers) are also appreciated because they combine something personal with the freedom of choice.

Finally, studies on the impact of employee gifts repeatedly confirm their positive influence on key performance indicators. The consulting firm Gallup found that employees who receive regular recognition are significantly happier and more motivated (source: https://www.karrieredirekt.de/cadeau-salarie/) . A Deloitte study revealed that companies with a strong appreciation culture have approximately 20% higher employee satisfaction than average. Figures like these confirm that investments in employee appreciation—including gifts and bonuses—pay off. They lead to more engaged teams, fewer absenteeisms, lower turnover, and better performance. In short, employee gifts are trending because they create a win-win situation—for both employees and the company.

Touch oneConcepts as a partner for reward solutions

When implementing employee gifts and reward programs, companies face the challenge of finding suitable ideas, managing logistics, and complying with tax regulations. It can be helpful to have an experienced reward solutions partner on hand. One such specialist is Touch oneConcepts . The company has over 20 years of experience in the field of non-cash rewards and incentives and supports companies across Europe in developing customized reward programs. With a selection of over 5,000 high-quality reward items, Touch oneConcepts offers the opportunity to respond individually to employee preferences. From classic non-cash gifts to personalized rewards to innovative digital solutions – such a partner takes care of the procurement, storage, and delivery of the rewards (reward fulfillment) and ensures that everything reaches employees smoothly and on time.

Use employee gifts in a targeted manner – optimize your reward solutions now!

Would you also like to leverage the positive effects of employee gifts for your company? Then now is the right time to optimize your reward solutions . Whether you already distribute occasional gifts or want to set up a new reward program , a well-thought-out strategy will pay off. Analyze the needs of your workforce, focus on modern trends like personalization and sustainable gifts, and pay attention to the most tax-efficient implementation. We're happy to provide professional advice: An experienced partner like oneConcepts is at your side to develop and implement an efficient and employee-focused reward concept.

Act now: Increase your employees' motivation and loyalty with appropriate gifts and rewards. Start the dialogue today – your employees will thank you! Contact us to learn more about customized reward solutions and take your company's employee gifts to the next level. Together, we'll create a culture of appreciation that will benefit both your employees and your company in the long term.