"How much should we spend on corporate gifts?" is one of the first questions any HR, admin or finance team asks — and there's no universal answer. What there is is a reliable way to build a budget that fits your company, avoids surprises and holds up when finance reviews it.
Step 1: List the occasions for the year
Most companies gift on more occasions than they budget for. Write them all down:
- Festivals: Diwali, and any regional festivals relevant to your offices
- Year-end and new year
- Onboarding: welcome kits for new joiners
- Milestones: work anniversaries, promotions, long-service awards
- Recognition: rewards and awards through the year
- Events: offsites, conferences, launches
- Clients and partners: festive gifts, deal closures, relationship milestones
Step 2: Group recipients into tiers
Not everyone needs the same gift. Simple tiers make budgets easier to defend:
| Tier | Typical recipients |
|---|---|
| Everyone | All employees, including contract staff where appropriate |
| Core | Permanent employees, managers |
| Leadership | Senior leaders, long-service employees |
| Key clients | Decision-makers at important accounts |
| Partners | Vendors, agencies, channel partners |
Step 3: Set a per-person band for each tier and occasion
Use bands rather than exact prices. The brackets companies most often search for — under ₹500, ₹500–₹1,000, ₹1,000–₹2,500 and above — are a useful starting point. In general:
- Under ₹500: one good, useful item, simply presented
- ₹500–₹1,000: an everyday item people will keep using, or a small hamper
- ₹1,000–₹2,500: a recognised brand, a combined set or desk tech
- Above ₹2,500: fewer, finer items — signature pens, premium sets, personalised keepsakes
Step 4: Add the costs people forget
The product is only part of the bill. A complete budget includes:
| Cost | What drives it |
|---|---|
| Branding | Method, number of positions, number of colours, personalisation |
| Packaging | Boxes, inserts, cards, ribbon, kit assembly |
| Delivery | One office drop vs individual home deliveries; number of cities |
| GST | Charged on the gifts you buy — and input tax credit isn't available on goods given as gifts |
| Contingency | New joiners, replacements, re-deliveries |
An example worksheet
The numbers below are an illustration of the arithmetic only — swap in your own headcount and bands.
| Occasion | Recipients | Band per person (gift + branding + packaging) | Subtotal |
|---|---|---|---|
| Diwali | 120 employees | ₹1,000 | ₹1,20,000 |
| Diwali | 15 key clients | ₹2,500 | ₹37,500 |
| Welcome kits | 40 new joiners | ₹1,500 | ₹60,000 |
| Work anniversaries | 30 employees | ₹800 | ₹24,000 |
| Before delivery, GST and contingency | ₹2,41,500 |
Then add delivery (based on how many addresses and cities), GST as charged on your invoices, and a contingency of your choosing.
Plan around the tax limits
Two rules affect how you plan employee gifts. Confirm the position for your company with your tax advisor.
- Income tax: under the Income-tax Rules, 2026 (effective from 1 April 2026), non-cash gifts, vouchers and tokens from an employer are tax-free for the employee if their total value in the tax year does not exceed ₹15,000 — up from ₹5,000 earlier. Because the limit covers all such gifts in the year, add up festivals, anniversaries and rewards per employee when you plan.
- GST: gifts by an employer to an employee up to ₹50,000 in a financial year aren't treated as a supply. Input tax credit isn't available on goods given as gifts, so treat the GST you pay as part of the cost.
Ways to make a budget go further
- Plan early. Last-minute orders limit your options and cost more in express delivery.
- Choose fewer, better items. One quality item is remembered; three fillers are not.
- Standardise packaging across occasions so you can order in larger runs.
- Consolidate deliveries to offices where teams are on site.
- Order welcome kits in batches from a hiring forecast, rather than one at a time.
- Get quotes broken down into product, branding, packaging, delivery and GST so you can see where the money goes.
Common budgeting mistakes
- Budgeting only for the product and forgetting branding, packaging and delivery
- Forgetting new joiners, people on leave and remote employees
- Not accounting for GST as a cost
- Planning each occasion separately and crossing the yearly tax limit for employees without noticing
- Comparing vendor quotes on unit price alone
Frequently asked questions
How much should a company spend per employee on corporate gifts?
There's no standard figure. Set a band per tier and occasion based on your headcount and how many times a year you gift, and check each employee's yearly total against the income-tax limit for gifts.
What costs should a corporate gifting budget include?
The products, branding, packaging and assembly, delivery, GST and a contingency for extra recipients and re-deliveries.
Are corporate gifts to employees tax-free?
Non-cash gifts are tax-free for the employee if the total value of gifts, vouchers and tokens from the employer in the tax year is within ₹15,000 (Income-tax Rules, 2026). Above that, the whole amount becomes taxable. Confirm with your tax advisor.
Can we claim GST input tax credit on corporate gifts?
No. Input tax credit isn't available on goods given away as gifts (Section 17(5)(h) of the CGST Act), so budget GST as a cost.
A good gifting budget isn't about spending more — it's about knowing exactly where every rupee goes, before the festive rush starts.
