How a ‘trivial’ gift can be a big deal for your employees

Christmas is approaching fast and many business owners are weighing up how to show their employees appreciation during the festive season.

Traditionally, companies have offered a Christmas bonus or gift. While always welcome, cash gifts made through payroll are subject to tax and National Insurance. This can make them a costly headache for either the employer or the employee.

For an employee, if tax and NI are not factored in the tax man takes their cut and the gift becomes a lot smaller.

On the other hand, if an employer wants workers to receive a specific amount, they will have to cover the tax and NI on top. This could almost double the cost.

A better way

There is a third way to gift employees however – which is both straightforward and cost-effective.

Corporate gifting experts Love2shop have been helping employers of all types and sizes to offer rewards for their staff for decades. Now they have launched a handy tool that helps employers see the savings on offer by switching to gift cards.

The Tax-Free Gift Calculator allows employers or HR teams to input the amount they want each employee to receive as a gift after tax.

It will calculate how much they will pay in real terms – including tax and National Insurance – for both basic rate taxpayers and higher-rate taxpayers. Alongside this it will show how much the same gift would cost if given in Love2shop gift cards.

The tool is free and you can try it here.

According to the second annual Love2shop Employee Value Report 2023, 90% of UK employees said a surprise gift of a multi-retailer gift card would make them feel more valued.

And 57% of people said days off, multi-retailer gift cards or flexible working are the best workplace rewards.

Now, HMRC may have a reputation of being a little Scrooge-like, but they have a key allowance that can help employers give generously to their employees – the Trivial Benefits Provision.

This allows employers to offer staff non-cash gifts up to the value of £50 per employee, free from tax or National Insurance.

That means if an employer wants to gift up to £50, they can do so using Love2shop Gift Cards, Contactless Gift Cards, E-Gift Cards or vouchers. No tax, no National Insurance and no paperwork.

A time for giving

In other words, giving each employee £50 with Love2shop will cost the business just £50 per person – and the recipient will get the full amount.

Love2shop is one of the best known gifting brands in the UK. Available as a gift card, e-gift card, contactless gift card or voucher, its products are accepted by around 150 retailers.

These include well-known brands such as Marks & Spencer, Iceland, Matalan, Argos, Costa, Harvester,Tui, Jet2Holidays and many more.

That flexibility means that employers can be certain their gift is what everyone wants, as it really is the gift of choice. It may be called ‘trivial’ but it’s a benefit that will prove anything but for both employers and employees.

Contact our team today to discuss how Love2shop can help you get gifting right this Christmas, with physical gift cards and digital codes still available for pre-Christmas delivery.