The holiday season is a golden opportunity to show your team that you appreciate them. A thoughtful gift boosts morale, strengthens culture, and sends the message that your organization values people just as much as performance. And with a little strategy, you can make this moment meaningful, inclusive, and totally compliant. Yes, even the IRS wants you to get this right.

Leaders often underestimate how far a small gesture can go. Holiday gifts create a moment of human connection at the busiest time of year, and that moment sticks.

• Signals appreciation at a time when employees need it
• Reinforces a strong, people-centered culture
• Helps remote and hybrid teams feel seen
• Sets a positive tone heading into Q1

Holiday gifts only work when everyone actually feels included. A little intentionality keeps the experience warm, thoughtful, and universally appreciated.

• Keep themes neutral so no one feels left out
• Stay mindful of dietary needs and ethical preferences
• Provide options when possible to create personalized experiences
• Choose gifts that appeal across cultures such as cozy items, plants, journals, or productivity tools
• Steer clear of alcohol unless you know your team extremely well

Nothing ruins holiday cheer faster than accidentally creating taxable income for your employees. Enter the De Minimis Fringe Benefit Rule, the IRS’s way of saying, “Small and occasional? We’ll let it slide.”

These are low-value, occasional items that don’t require tracking and stay tax-free.

• Holiday treats
• Modest company swag
• Small plants or desk accessories
• Coffee mugs and tumblers
• Snack boxes or event refreshments

They’re simple, thoughtful, and the IRS stays happy.

These must run through payroll as taxable income, no exceptions. Yes, even the beloved gift card.

• Cash
• Gift cards of any kind
• High-value or luxury items
• Frequent gifts throughout the year

If an employee can turn it into cash, the IRS considers it compensation. No holiday magic there.

If it’s tiny, infrequent, and honestly more effort to track than it’s worth, it’s likely De Minimis. If it can buy groceries or pay a bill, it’s taxable. CultivaHR helps businesses sort this out early so payroll doesn’t get a surprise in January.

You can stay compliant and still make your team feel appreciated.

De Minimis-Friendly Wins

• Branded blankets or bottles
• Succulents or small houseplants
• Wellness items like candles or journals
• Seasonal snack boxes
• Desk tools or accessories

These create delight without creating taxable headaches.

Non–De Minimis Favorites (Taxable, but still great if planned)

• Gift cards
• Cash bonuses
• Concert or experience tickets
• Tech gadgets
• Luxury items

If you go this route, loop payroll in before distribution. Employees will thank you for the clarity, and your accountant will thank you for the foresight.

Holiday gifting should feel good, not stressful. With the right guidance, you can celebrate your team, stay compliant, and strengthen your culture in one thoughtful move. CultivaHR helps organizations create appreciation strategies that are meaningful, inclusive, and aligned with your broader HR goals.

If you're ready to elevate your holiday gifting approach, CultivaHR is here to support your next step.