Giving a gift to an employee is a common practice in the workplace. The rules are simple and straightforward. A gift is not considered taxable income for the recipient and neither does it count as an expense for the company.
What is considered a gift?
Gifts are given by one person to another without any expectation of return or compensation. These gifts include things like flowers, food, clothing, or other items that are not used for business purposes. The company does not have to pay tax on these gifts because they are considered non-business income.
A gift can also be money that you give your employee without expecting anything in return, such as a bonus or raise in salary.
Types of Gifts that Employees Usually Accepted in South Africa
In South Africa, giving gifts to employees is very common. This is because the country has a history of celebrating people’s birthdays and anniversaries.
One of the most popular types of gifts in South Africa is food. It is usually given on someone’s birthday or anniversary. Another type of gift that employees are often given is flowers.
Gift Types and Specific Rules for Employees in South Africa
In South Africa, gift-giving is a big part of business culture. It is expected that employees will give their bosses a gift on their birthday or at the end of the year.
Gifts are given by employees to their bosses in order to show appreciation and respect. The gifts are also given with the hope that they will be reciprocated by their boss.
There are different types of gifts that can be given to an employer depending on what they like and what they need. Some rules are also set out for these gifts such as not giving alcohol or cigarettes as well as not giving cash.
Is a Gift to an Employee Taxable Should they resign in South Africa?
A gift to an employee is taxable if the employee resigns within a year of receiving it.
According to South African law, gifts to employees are considered taxable income for the employer. If the gift is made in connection with or in contemplation of an employment contract, then it is considered a taxable benefit and not a gift.
Employees who resign from their job within one year of receiving the gift will have to pay tax on any benefits received as part of their salary package.
