Employee gift baskets, packed for each person.

A box is a physical, hand-packed gift, which makes it a non-cash gift under the Canada Revenue Agency policy on gifts, awards and long-service awards. There is no near-cash question to argue, the way there is with a gift card. Under that policy, non-cash gifts and awards given to an employee at arm’s length are generally not treated as a taxable benefit while their combined fair market value, which the CRA measures with any taxes on the gift included, stays at $500 or less per employee per calendar year. That $500 is an annual total across every non-cash gift the employer gives that person, not a figure per gift, and it is an administrative concession rather than an exemption written into law.

The Signature box at $119 and the Premier box at $189 sit well under that line, so a single box at either size generally would not create a taxable benefit for an employee at arm’s length, assuming the room has not already gone on other non-cash gifts that year. The Luxury box at $299 fits under the line too, though it takes more than half the room, so there is not much left for other non-cash gifting to the same person that year. The threshold does not apply to people who are not at arm’s length, such as owners, shareholders or their relatives, where a gift is generally a taxable benefit whatever it cost.

If you are weighing a box against a gift card, the rule changed in 2022. A gift card is not always taxable, but to stay non-cash it has to be closed loop, usable only at a named retailer or group of retailers, it has to say on its terms that the balance cannot be turned into cash, and the employer has to keep a gift-card log. Miss any one of those and the card is near-cash and taxable whatever the amount. A box removes those conditions and the bookkeeping that comes with them, so you keep normal expense records and nothing more.

Whether your business can deduct the cost is a separate question from whether the employee is taxed. The two tests run independently and deductibility turns on your own facts, so confirm it with your accountant rather than treating it as automatic.