Whether it’s for staff or customers, these holiday appreciation ideas will serve your small business well.
Is it a Holiday Appreciation Gift for Tax Purposes?
When thinking about bonuses or gifts for your team, you need to consider if what you’re giving them is a taxable benefit or not. It’s important to run bonuses through your payroll system to ensure that source deductions are appropriately accounted for. Bonuses for your team shouldn’t result in extra work due to a surprise tax bill for your team.
Cash or items such as gift cards, and other investment-related items such as stocks or commemorative gold coins, are almost always taxable benefits. Keep that in mind when deciding what to give.
Non-cash gifts are not taxable benefits so long as they are under the annual limit of $500. Tickets to an event, gift certificates for a specific service (such as a massage) or a tangible item (such as a bottle of wine) would fall into this category. Canada Revenue Agency (CRA) currently includes gift certificates for movie theatres as a taxable benefit.
One of the key determinants of the taxable nature is, is it a gift or is it a reward? Gifts are tied to special occasions such as the holidays, work anniversaries and so on. Rewards are always taxable, even if they aren’t in cash or near-cash, and are a direct result of your team member’s performance.
It’s important to know your team and to understand what would be a good gift for them and what wouldn’t be. It’s also important to be sensitive to our diverse culture and avoid any accidental offence. For instance, it isn’t a great idea to give a bottle of wine to someone who doesn’t drink.
Customer Holiday Appreciation
This is the time of year where everyone appreciates being appreciated – and that includes your customers. Whether you’re sending cards or gift cards or giving physical gifts, this is a great time to show that you know your customers. Again, it’s important to be sensitive and show you know your customers. I once made the mistake of giving a nice bottle of sake to a pregnant woman – talk about being insensitive!
Another thing to keep in mind is that you need to be able to show CRA who the gift was delivered to and provide their contact information. It’s best to do this directly on the receipt, but a schedule outlining the gifts purchased and who they went to is also acceptable.
Something many business owners try to get away with is buying a lot of gift cards and saying they are gifts, but not tracking where they go, and keeping several to use themselves. CRA has caught onto this and this can be an area where business owners find themselves in hot water.
Be Sensitive About Holiday Appreciation
With Canada’s diverse culture, it’s more and more important to celebrate our differences and to understand your team and your customers. For quite a while now, the world has been using the term holiday season instead of Christmas and this is appropriate.
There are many different holiday appreciation ideas and traditions celebrated this time of year, recognize them. It’s important not to alienate people or make them feel otherwise excluded accidentally with your holiday celebrations.
Plan Your Holiday Party with Guests in Mind
Similarly, when planning holiday parties, it’s important to consider the dietary and family needs of your team. Set a budget and stick to it. Are you inviting children? Will Santa be making an appearance? Or is it adults only?
With this season, things will likely remain quite restricted with many people being uncomfortable going to public places for events. If you are taking your team out for a meal, make sure it’s appropriate. It’s insensitive to take a vegan to a steakhouse.
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