If you've read about Germany's Sachbezug allowance or Belgium's flat gift ceilings, you might expect South Korea to have something similar: a clean won figure under which a holiday gift to an employee is simply tax-free. It doesn't, at least not for income tax. A Chuseok hamper, a Lunar New Year gift set, or a branded merchandise gift handed to an employee is, in principle, taxable earned income at its full market value the moment it's given. There is a separate rule that exempts up to ₩100,000 a year from VAT, but that's a completely different tax, and it does not make the gift free of income tax for the employee. The two get confused constantly. Here's what actually applies.
Why holiday and anniversary gifts are taxable income
Under Korean tax law, anything of value an employer gives an employee in connection with their employment is treated as part of their compensation. That includes in-kind gifts: Chuseok and Lunar New Year hampers, branded merchandise, work-anniversary gifts, and similar items. Unless a specific exemption applies, the market value of the gift at the time of distribution is added to the employee's earned income (근로소득) and taxed accordingly, exactly as if it were a cash bonus.
There is no general de minimis threshold that shields routine holiday or anniversary merchandise gifts from income tax. That's the single most important thing to get right about Korea's rules, and the point most international guides gloss over or get backwards.
The narrow exception: congratulatory and condolence money
Korean tax law does carve out one income-tax exemption, but it's much narrower than "holiday gifts." Congratulatory or condolence money (경조사비) tied to a genuine personal life event, a wedding, a birth, a bereavement, a hospitalization, can be non-taxable to the employee, but only to the extent it's "reasonable by social norms" (사회통념상 인정되는 범위) relative to the employee's position and salary, and consistent with the company's own internal policy on such payments.
This exception is built for life-event support, not for scheduled, company-wide merchandise gifts. A Chuseok gift box handed to every employee on the payroll doesn't qualify simply because it happens around a holiday; it's a routine in-kind benefit, not congratulatory or condolence money tied to an individual's personal circumstance. Don't stretch this exception to cover holiday or anniversary gifting: it wasn't designed for that, and doing so is the kind of assumption that gets flagged in a tax audit.
A separate VAT-only exemption you shouldn't confuse with income tax
Here's where most of the confusion comes from. Korean VAT law has its own, separate rule for employer-to-employee gifts: up to ₩100,000 per calendar year is exempt from VAT, split across three separate, additive buckets:
- Congratulatory/condolence-occasion gifts (a subset distinct from the cash payments described above)
- Holiday gifts, specifically for Lunar New Year and Chuseok
- Birthday or founding-anniversary gifts
Because these buckets don't share room, a company could in principle give an employee ₩100,000 of VAT-exempt Chuseok gifts and a separate ₩100,000 of VAT-exempt birthday gifts in the same calendar year, ₩200,000 total across the two buckets, each individually within its own VAT-exempt ceiling. Above ₩100,000 within a given bucket in a given year, 10% output VAT applies to the excess amount.
What this rule does not do is exempt the employee from income tax. VAT and income tax are entirely separate taxes governed by separate provisions. A gift can sit comfortably inside its ₩100,000 VAT-exempt bucket and still be fully taxable as earned income to the employee at its full market value. Treating the ₩100,000 figure as a general "tax-free gift allowance" is the single most common mistake companies make when researching this topic, and it's wrong on both sides: it understates the income-tax exposure and overstates what the VAT rule actually covers.
12 gift ideas
None of this rules out giving employees branded merchandise, it just means the tax treatment needs to be handled with clear eyes rather than assumed away. The items below are chosen to work well for broad, company-wide distribution (a whole office, a whole team, an entire Chuseok gifting run), where the per-person value is modest and easy to account for correctly, alongside a few higher-value options worth a more deliberate decision.
1. Hoodie – The Rex: the substantial seasonal gift
A genuinely substantial item that reads well as a winter or Chuseok gift-set centerpiece for the whole company, well liked without being extravagant.
- Material: heavyweight cotton-poly fleece.
- Branding: embroidered logo or large-format print.
- Order: MOQ 100 · from ₩60,135/unit.
2. Sports Socks: the safe favorite
Sunday's most-ordered item: small, unexpected, and about as low-complication as broad-distribution merchandise gets.
- Material: 80% cotton, 17% polyamide, 3% elastane.
- Branding: knitted-in logo zones.
- Order: MOQ 100 · from ₩6,000/unit.
3. Recycled Steel Bottle: the sustainable pick
Made from recycled steel, a good fit for companies that want their Chuseok or year-end gifting to line up with sustainability messaging.
- Material: recycled stainless steel.
- Branding: laser engraving.
- Order: MOQ 50 · from ₩16,500/unit.
4. A5 Notebook: the low-key default
A well-made notebook reads as thoughtful without being extravagant, an easy, broadly-distributed pick for an all-hands or onboarding batch.
- Material: recycled paper cover and pages.
- Branding: foil stamp or deboss on the cover.
- Order: MOQ 100 · from ₩6,870/unit.
5. Premium Tote Bag: the everyday carry
Genuinely useful rather than decorative, a tote gets real daily use, which makes it a strong choice for a broad, event-wide handout.
- Material: heavyweight cotton canvas.
- Branding: screen print.
- Order: MOQ 100 · from ₩9,660/unit.
6. Knitted Scarf: the seasonal touch
A seasonal item that suits the timing of a Lunar New Year gift run, modest enough in value to stay well clear of individual-gift complications.
- Material: acrylic-wool knit blend.
- Branding: woven label or embroidered patch.
- Order: MOQ 100 · from ₩11,490/unit.
7. Baseball Cap: the classic team gift
A classic, easy to distribute across an entire team or department without singling anyone out for extra value.
- Material: cotton twill.
- Branding: embroidered front panel.
- Order: MOQ 100 · from ₩12,510/unit.
8. Espresso Mug: the desk-and-kitchen staple
A simple mug that ends up on every desk in the office, modest enough to hand out company-wide without a second thought.
- Material: ceramic.
- Branding: printed or laser-etched logo.
- Order: MOQ 108 · from ₩12,660/unit.
9. Bamboo Tea Bottle: the eco-premium drinkware
A nicer shelf presence than standard steel drinkware, a good fit for a broad Chuseok or year-end giveaway rather than a targeted individual reward.
- Material: bamboo exterior with a stainless steel interior.
- Branding: laser engraving.
- Order: MOQ 50 · from ₩28,050/unit.
10. RollTop Backpack: the higher-value pick
At this price point it's a genuinely appreciated gift, but it's also exactly the kind of individually-given item most likely to be treated as full taxable earned income when handed to one named employee. Worth a deliberate decision, ideally logged and accounted for as such, not a default batch gift.
- Material: water-resistant recycled polyester.
- Branding: debossed patch or embroidery.
- Order: MOQ 25 · from ₩36,855/unit.
11. Noise-Cancelling Headphones: the premium tech gift
A genuinely premium gift for long-service anniversaries or leadership-level recognition, but its market value should be run through payroll like any other in-kind benefit, not treated as a casual freebie.
- Material: ABS housing with memory-foam ear cushions.
- Branding: laser-etched logo on the ear cup.
- Order: MOQ 50 · from ₩36,690/unit.
View Noise-Cancelling Headphones →
12. Wireless Powerbank: the higher-value tech gift
At this price point it's genuinely appreciated, but it's also exactly the kind of individually-given item most likely to be flagged as full taxable income if handed to a single employee. Worth a deliberate decision, not a default.
- Material: aluminum and ABS housing.
- Branding: laser engraving.
- Order: MOQ 50 · from ₩27,585/unit.
What about client gifts?
Gifts to clients or business partners follow a different framework: entertainment expense (기업업무추진비), which is capped and much more restrictive than ordinary advertising spend. But there's a carve-out that pulls small, named-recipient gifts out of that capped category entirely.
A gift to a specific, named recipient is reclassified as a fully-deductible advertising/promotional expense instead of capped entertainment expense, if it meets both conditions:
- ₩30,000 or less per item, and
- ₩50,000 or less total, per recipient, per year
Exceed either threshold, on a single item or across the year for one recipient, and the gift falls back into the capped entertainment-expense category rather than the favorable advertising treatment.
Separately, gifts to an unspecified or broad audience, calendars, samples, branded items handed out at a trade show or to the general public rather than to named individuals, have no per-item cap at all as advertising expense. That's a more generous rule than the named-recipient carve-out, precisely because there's no individual attribution to worry about.
Beyond the small-gift carve-out, general entertainment-expense deductibility for named client relationships is capped by a broader ceiling: a base amount of ₩12,000,000/year for general corporations (₩36,000,000/year for SMEs), plus a revenue-based add-on percentage. Amounts above that ceiling are simply non-deductible, with no carryforward to future years.
Common mistakes
- Assuming the ₩100,000 VAT exemption also makes the gift income-tax-free for the employee. It doesn't. VAT and income tax are separate taxes with separate rules; staying inside the VAT-exempt bucket says nothing about the employee's income-tax exposure.
- Exceeding either the ₩30,000-per-item or ₩50,000-per-recipient-per-year client-gift threshold. Go over either one and the gift loses the favorable advertising-expense treatment entirely, falling back into the capped entertainment-expense category.
- Assuming Chuseok or Lunar New Year gifts get special income-tax treatment because they're holiday-related. They don't. They're taxed like any other in-kind benefit, at full market value, with no holiday-specific income-tax exemption.
Note: this article is a general explainer, not tax advice. Rules and interpretations can change, so confirm how they apply to your business with a licensed Korean tax accountant (세무사).
This guide is part of our complete country-by-country series. See Employee Gift Tax Rules by Country: The Complete 2026 Guide for all 43 countries.
Order gifts for your team
Every product above is fully customizable with your branding and available in business order quantities. Browse the full range in the Sunday catalog to put together a gift set that fits your situation.
