A year-end gift for your employees? Here's how to keep it tax-efficient
December 2025 - The end of the year is the perfect time to thank your employees for their hard work. However, be careful, because the tax authorities and social security agency are keeping an eye on the end-of-year gifts you give out. Fortunately, you can treat your staff in a tax-efficient way within certain limits.
December is the month when employees appreciate a small end-of-year gift. A small gesture in the form of a gift, a gift voucher, or a token of appreciation on special occasions works wonders for motivation. But if you want to be generous, you also need to be careful. Because if the tax authorities or the social security authorities consider your gifts to be wages, you will have to pay contributions and taxes on them.
When can you give a gift without additional costs?
Gifts from employer to employee are in principle considered wages. However, there are exceptions where gifts are exempt from social security contributions and withholding tax, and are also fully deductible for the employer. The most important conditions? The gift must be linked to a specific occasion, such as Sinterklaas, Christmas or New Year, and the amount must not be too high.
For these end-of-year occasions, a maximum of 40 euros per employee per year applies, to be increased by 40 euros per dependent child. This means that an employee with two children can receive up to 120 euros worth of gifts without having to pay social security contributions on them.
If that ceiling is exceeded, the RSZ will consider the entire amount as wages—not just the excess amount. In that case, you will have to pay social security contributions on the total amount.
Other occasions: what is and isn't allowed?
In addition to the end-of-year period, there are other occasions when employers can give gifts, each with their own rules:
· Upon retirement: a maximum of 40 euros per full year of service, with a minimum of 120 euros and a maximum of 1,000 euros. For example, an employee with 20 years of service can receive a gift of 800 euros without social security contributions.
· Upon marriage or legal cohabitation: a maximum of 245 euros per employee.
· Upon receiving an honorary award: a maximum of 120 euros.
· For a birth or adoption: maximum €50, although these expenses are not deductible as professional expenses.
· For birthdays: maximum €40 per employee per year. Please note: these are subject to social security contributions, but are exempt from withholding tax.
These amounts apply per employee per year. Anyone who exceeds the maximum amounts risks having the entire sum considered as wages, with all the tax consequences that entails.
Tax deductible, but only under three conditions
If you want your end-of-year gifts to be tax deductible, you must meet three clear conditions:
· Equal treatment: all employees must receive the same benefit
· Appropriate occasion: the gift must be given on the occasion of Sinterklaas, Christmas, or New Year's
· Within the maximum: the total amount may not exceed 40 euros per employee, possibly increased by 40 euros per dependent child.
If you meet these three conditions, you may deduct the gift in full as a business expense.
Popular gift vouchers
More and more employers are opting for gift vouchers instead of physical gifts. They are convenient, fiscally transparent, and give employees freedom of choice. However, the rules are strict:
· The vouchers may be valid for a maximum of one year.
· They may not be exchanged for cash.
· They can only be redeemed at companies that have an agreement with the issuer.
Don't forget the end-of-year bonus
In addition to gifts, many employees are entitled to an end-of-year bonus or thirteenth month's salary. Whether this is mandatory depends on the joint committee to which your company belongs. In most sectors, this is laid down in a collective labor agreement.
For example, PC 200—the joint committee for white-collar workers—stipulates that employees are entitled to an end-of-year bonus if they have been employed for a certain number of months. The amounts and conditions vary from sector to sector, but the principle remains the same: the end-of-year bonus is a legal or sectoral right, while the end-of-year gift is a voluntary token of appreciation.
