Gift card or a real gift for employees?

Yes. IRS Publication 15-B says cash and cash equivalents, including gift cards, "are never excludable as a de minimis benefit" (IRS Publication 15-B). The IRS de minimis page adds that "Cash or cash equivalent items provided by the employer are never excludable from income" (IRS: de minimis fringe benefits). That makes a gift card part of the employee's wages.

Publication 15-B has the fuller rules for employers. Your payroll provider or accountant can tell you how to handle it.

A non-cash gift that is small and occasional may count as a de minimis fringe benefit, one so small that accounting for it would be unreasonable. Publication 15-B gives "holiday or birthday gifts, other than cash, with a low fair market value" as an example, and the IRS de minimis page lists holiday gifts among its examples.

Whether a particular gift qualifies depends on its value, how often you give it and your circumstances. We can't tell you how to treat it. Ask your accountant, and read the IRS pages linked here.

Because they're easy. One card works for everyone, the person picks what they want, and nobody needs an address.

The trade-off is that a gift card is taxed like cash and can feel like it: a card for the same amount to everyone says little about the person who gets it.

Many would. Asked to choose between a cash bonus and a company holiday party, "more than four in five full-time employed Canadians would choose a cash bonus", according to an October 2026 survey by Employment Hero, which sells HR software (Canadian HR Reporter, October 22, 2026, read October 29, 2026).

If you can pay a bonus, pay it through payroll. A gift does a different job. It comes on top of pay, not instead of it, and it says you know who the person is. A gift card does neither as well as cash or a real gift.

When you know something about the person. A ceramic mug for the person who collects them, good tea for the tea drinker, running socks for the runner: a gift like that is remembered in a way a card balance isn't.

Gratos makes that practical for a whole team. Save what you know about each person once: what they like, what they avoid, their sizes and what never to send them. Gratos suggests a gift for each person from real stores, at the store's own price, or you choose one. You review the list and approve the campaign's total, and nothing is bought until then. The store ships each gift straight to the person.