In New Zealand, whether a Christmas gift to an employee is tax-free comes down to the FBT "unclassified benefits" de minimis exemption, not a Christmas-specific rule. Get it right and the gift costs nothing extra; go even slightly over the threshold and the employer owes fringe benefit tax (FBT) on the entire value, not just the excess. This guide explains the $300/$22,500 rule, how Christmas parties and client gifts are treated separately, and shows 12 gift ideas that comfortably stay compliant.
The $300/$22,500 FBT de minimis exemption
New Zealand has no dedicated "Christmas gift" tax rule. Instead, non-cash gifts to employees fall under Inland Revenue's unclassified benefits category, and a de minimis exemption keeps small, occasional benefits out of the fringe benefit tax net, provided two separate limits both hold:
- NZD $300 per employee, per FBT quarter. The total value of unclassified benefits given to that employee in the quarter must not exceed $300.
- NZD $22,500 employer-wide, per year. The total value of unclassified benefits given to all employees across a rolling four-quarter period must not exceed $22,500.
FBT is a tax paid by the employer, not the employee, it never shows up on a payslip. But the mechanics are unforgiving: this is a cliff-edge test, not a sliding-scale allowance. If either limit is breached for a given employee or quarter, FBT applies to the entire value of that employee's unclassified benefits for the quarter, not merely the amount above $300. A $310 gift doesn't trigger FBT on $10, it triggers FBT on the full $310. The same goes for the employer-wide cap: cross $22,500 across the rolling four quarters and every unclassified benefit given in that period becomes subject to FBT, even the ones that individually sat well under $300.
Because of this, most employers treat $300 per employee per quarter as a hard ceiling to shop under, rather than a target to approach.
Christmas gifts and parties: entertainment vs. non-entertainment
New Zealand tax law draws a line between entertainment and non-entertainment spending, and Christmas gifting sits on both sides of it:
- Non-food gifts, vouchers, branded merchandise, event tickets, are assessed under the FBT unclassified benefits thresholds described above.
- Food and drink gifts, along with staff Christmas parties, fall under separate "entertainment expenditure" rules. These are only 50% deductible for income tax purposes, the same limitation that applies to client meals and hospitality.
Entertainment-style gifts and parties are generally FBT-exempt if the event or gift is open to staff generally, rather than offered only to a select group of employees. A company-wide Christmas party or a hamper given to the whole team sits differently, tax-wise, from a bottle of wine handed to one manager.
Cash is never subject to FBT
Cash gifts and cash bonuses to employees are never subject to FBT, full stop. Instead, they're simply processed through PAYE as ordinary income, taxed at the employee's normal marginal rate, the same as any other payment on their payslip. If you'd rather avoid the FBT de minimis calculation entirely, a cash bonus is the simplest route, though it comes with less of the "gift" feel that a physical present carries, and the employee sees a smaller net amount after tax.
12 gift ideas
1. Hoodie – The Rex: a gift employees actually wear
A heavyweight organic cotton hoodie that comfortably fits within the $300 quarterly limit on its own, and one of the most popular gifting items in the catalogue.
- Material: 90% organic cotton, 10% polyester.
- Branding: embroidery, print, or patches.
- Order: MOQ 100 · from 78 NZD/unit.
2. Sports Socks: the safe, low-cost favourite
A small, unexpected gift that always lands well, and leaves plenty of room under the $300 threshold to pair with something else.
- Material: 80% cotton, 17% polyamide, 3% elastane.
- Branding: knitted-in logo zones.
- Order: MOQ 100 · from 8 NZD/unit.
3. Recycled Steel Bottle: everyday hydration
Vacuum insulation in recycled stainless steel, a gift that gets used and seen every day around the office.
- Material: recycled stainless steel.
- Branding: laser engraving or print.
- Order: MOQ 50 · from 21 NZD/unit.
View the Recycled Steel Bottle →
4. A5 Notebook: FSC-certified paper
An A5 hardcover with elastic closure and ribbon marker, practical with a traceable material story.
- Material: FSC-certified paper, PU cover.
- Branding: debossing or print on the cover.
- Order: MOQ 100 · from 9 NZD/unit.
5. Premium Tote Bag: the lightweight carry
A heavyweight cotton tote with a premium feel, everyday enough to actually get used long after Christmas.
- Material: 270gsm cotton.
- Branding: print or custom straps.
- Order: MOQ 100 · from 13 NZD/unit.
6. Knitted Scarf: the cosy extra
A high perceived-value item that still sits comfortably within the quarterly limit.
- Material: 80% viscose, 20% polyester.
- Branding: woven label.
- Order: MOQ 100 · from 15 NZD/unit.
7. Baseball Cap: the everyday accessory
An affordable, highly visible accessory that works all year round, not just over the holidays.
- Material: 100% cotton.
- Branding: embroidery.
- Order: MOQ 100 · from 16 NZD/unit.
8. Espresso Mug: for the morning coffee
A compact espresso-sized mug, a small everyday object that sits on the desk long after the holidays end.
- Material: ceramic.
- Branding: print.
- Order: MOQ 108 · from 16 NZD/unit.
9. Bamboo Tea Bottle: the natural choice
A bamboo exterior over a durable stainless steel interior, a warmer-looking alternative to an all-metal bottle.
- Material: stainless steel, bamboo.
- Branding: laser engraving or print.
- Order: MOQ 50 · from 36 NZD/unit.
10. RollTop Backpack: the everyday bag
A water-resistant backpack with a laptop compartment that quickly becomes someone's everyday bag, still well inside a single quarter's $300 allowance.
- Material: GRS-certified recycled PU, water-resistant.
- Branding: print or embroidery.
- Order: MOQ 25 · from 48 NZD/unit.
11. Noise-Cancelling Headphones: the premium pick
A higher-end gift that still leaves plenty of headroom under the $300 quarterly limit, and makes a real difference to a busy workday.
- Material: recycled ABS, ANC + ENC, foldable.
- Branding: digital print or doming.
- Order: MOQ 50 · from 48 NZD/unit.
12. Wireless Powerbank: useful everyday tech
A magnetic wireless powerbank in recycled ABS plastic, genuinely useful for any commute or business trip.
- Material: recycled ABS plastic.
- Branding: pad print or digital print.
- Order: MOQ 50 · from 36 NZD/unit.
What about client gifts?
Gifts to clients and business partners follow entirely different rules from employee gifts, because there's no employment relationship and no FBT exposure. What matters instead is income-tax deductibility:
- 100% deductible if the gift is non-consumable, vouchers, branded merchandise, event tickets, flowers, or books all qualify. No FBT applies in any case, since FBT only concerns benefits provided to employees.
- 50% deductible if the gift is food or drink. This falls under the same entertainment expenditure rules that limit client meals to a 50% deduction.
In practice, this means a branded hoodie or gift voucher sent to a client is a cleaner deduction than a bottle of wine or a hamper of food.
GST on gifts
New Zealand's 15% GST follows the income-tax deductibility percentage set out above:
- 100% claimable as input tax for non-entertainment gifts (the same gifts that are 100% income-tax deductible).
- 50% claimable for entertainment-classed gifts, food and drink items subject to the 50% deductibility rule.
Gift cards and vouchers are a common trap here: they generally carry no claimable GST at the point the employer purchases them. GST only arises later, when the ultimate spender redeems the voucher against actual goods or services, not when the business buys the card.
A reform to watch
In April 2025, Inland Revenue released an FBT reform issues paper proposing to replace the current $300 per-employee / $22,500 employer-wide unclassified-benefits exemption with a new $200 (GST-inclusive) exemption, and to fold entertainment expenses into the FBT regime. This is a live proposal, not yet enacted law as of writing. Employers should keep an eye on it, since a move to a flat $200 threshold would meaningfully tighten what currently counts as a tax-free gift, but for now, the $300/$22,500 de minimis rule described above remains the current, applicable law.
Common mistakes
- Assuming only the excess above $300 triggers FBT. It doesn't work like an allowance with a top-up tax on the overage, the whole amount becomes subject to FBT the moment either threshold is breached.
- Giving a food or drink gift and assuming it's 100% deductible like non-food gifts. Food and drink fall under the entertainment expenditure rules and are only 50% deductible, even when given to employees or clients you'd otherwise treat generously.
- Assuming a gift card carries claimable GST at purchase. It doesn't, GST on a voucher only arises when it's redeemed by the person who ultimately spends it, not when the business buys it.
If you're setting up an ongoing employee gifting program rather than a one-off order, Sunday's employee gifting platform handles sourcing, branding, and delivery in one place.
Note: this article is a general explainer, not tax advice. Thresholds and rules can change, including the FBT reform proposal outlined above, so confirm how they apply to your business with your accountant or Inland Revenue.
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 customisable with your branding and available in business order quantities. Browse the full range in the Sunday catalogue to put together a gift that stays within the FBT de minimis exemption. Sunday also supports enterprise-scale rollouts across multiple countries — see the full Sunday platform for details.
