Employee Gift Budgeting: How Much to Spend?

If you’re a small business owner, department manager, or team leader, you know how challenging it can be around birthdays, holidays, and other gift-giving events.

You want your staff to feel appreciated, but you also don’t want to invite unnecessary expectations or drama.

Depending on the occasion and who you’re giving the gift to, the average amount to spend on staff gifts can range from $10 up to $50 per staff per occasion, with an annual cap of $100 per staff. Exceptions do apply though.

With just a little planning, you can map out each possible event, knowing exactly how much to spend on employee gifts. Here are a few guidelines that will help you to navigate the murky waters of gift-giving in the office.

How Much to Spend on Staff Gifts?

If you’re a new manager, this is the perfect time to set a budget while thinking about the various events that occur throughout the year.

There are essentially 3 categories of gifting opportunities— annual holidays, annual individual events, and individual incidents. Generally speaking, you should spend an approximated combined amount of $100 per employee per year.

Below is a list of each category with recommended amounts per staff.

Annual Holidays – $15-25 annually

· Christmas/holiday season

· Other minor holidays (i.e. Valentine’s Day, Halloween)

· Company achievements

Annual Individual Events (occur for each person every year) – $25-50 per event

· Birthdays

· Employee anniversaries

Individual Incidents (occurring at random) – $25-50 per event

· Baby shower/new baby

· Engagement/wedding (How much to spend on an employee wedding gift?)

· Personal achievements (i.e. new home, graduation)

· Loss of a family member or pet

· Illness or injury

· Promotion

· Resignation

How Much to Spend on Employee Christmas Gift

Even though Christmas is one of the most popular times to hand out gifts, it is best to keep spending to a minimum, so that you can focus on more individualized events like birthdays and employee anniversaries.

However, that doesn’t mean you have to ignore Christmas gifts entirely. If you’re giving each person a gift, try not to spend more than $10-15/per employee.

Bear in mind that aside from the Christmas holiday, there will be other annual holidays that may require some allocation from your annual budget as well.

You could also try planning a white elephant or “secret Santa” party where there is a firm spending cap of $10-15. This way, everyone gets to participate in both gifting and receiving, without having to buy more than one gift.

Another way to celebrate Christmas is to host a potluck. This will allow you to conserve your gift budget while establishing a fun tradition.

Celebrate the Small Things

Outside of Christmas, there are other ways you can engage your entire team throughout the year. One idea is to give out little surprises for minor holidays (i.e. Halloween or National Doughnut Day (source)) as well as company achievements.

Plan on spending between $3-10 per employee for each minor holiday. Whether it’s a candy bar, Starbucks gift card, or hand-written note— small acknowledgements go a long way.

They can significantly boost your team’s morale and bring everyone together in a fun way, without breaking the bank.

Staff Gifts for Annual Individual Events

Birthdays and employee anniversaries are arguably the most important gifting opportunities. This is because they will inevitably occur once per year for each employee, giving everyone the chance to be recognized.

Still, you should plan on spending no more than $25-50 per occasion, as spending any more can introduce unhealthy expectations. It’s not uncommon to take your team out to lunch to celebrate but be careful about restaurant outings and parties.

Once you do something for one person, everyone will expect the same when it’s their turn, making it difficult to stick to your budget.

Staff Gifts for Individual Incidents

When it comes to individual incidents like new babies, graduations, or illness, make sure you’re taking the lead.

Oftentimes, your employees will want to plan a surprise party or fundraiser for their coworkers. However, it’s best to stay away from employee-sponsored activities, since you can’t control how much each person will receive.

For example, if you host a diaper drive for two expecting mothers, and one receives significantly more than the other, this invokes a popularity contest.

Instead, let your team know about your plan in advance and plan to spend no more than $25-50. You could buy cupcakes and balloons, or present a gift card to that employee during a small office celebration.

Or, you could purchase a greeting card for everyone to sign in addition to sending a bouquet of flowers.

Gifts for Staff Appreciation

Companies are increasingly aware of the importance of showing appreciation to employees as the key to employee retention.

It cannot be stressed enough how recognizing employees’ hard work and sacrifices can greatly help to boost their morale and drive even more workplace engagement. This, in turn, motivates them to work harder and contribute more proactively to achieving the company’s goals and objectives.

Gifts for employee appreciation and recognition do not have to be uninteresting. For more unique employee appreciation gift ideas that your employees would truly be grateful for, we have you covered here!

How to Time Staff Gifts

After deciding on a general budget, you’ll want to make sure that your timing is right.

For general holidays when everyone gets a gift, make sure you hand them out at the same time.

One way to do this effectively is for everyone to have a gift on their desk when they arrive in the morning. Doing so will help to make everyone feel included, especially if the gifts are identical or similar.

If you’re planning a party for someone, give your team plenty of advanced notice. This will help to minimize celebrations and gifts that happen on the side, keeping things transparent and fair amongst the team.

Other Common Pitfalls to Avoid

In addition to spending the same amount for each occasion, there is a gray area around celebrating individual incidents. For example, when employees are given special treatment for getting engaged, it inadvertently singles out those who aren’t married.

Try to find at least one personal incident per year that you can recognize for each employee. It’s also important to make sure that you’re documenting all of your gifts in a spreadsheet or calendar.

The last thing you want is for a valuable team member to become disgruntled because they were forgotten about. While it may be easy to accidentally forget a birthday, it will not be as easy for that employee to forget how left out they felt!

Plan and Lead with Confidence!

When you’re proactive as a leader, you can approach holidays and personal events with confidence, knowing your team will feel included and acknowledged while under your management.

When you follow this advice, it will help your team to feel at ease, while keeping you in the driver’s seat for budgets and expectations around gifts. It’s a guaranteed win-win for everyone!