corporate
Corporate gifting in Ontario: the CRA rules, real budgets, and when to order
Velvéa · 9 min read · September 27, 2026
Most guides to corporate gifting are written by people who have never had to answer the question a finance department actually asks: what does this do to our books? It is a fair question, and the answer runs against intuition. A gift basket full of food is not deductible the way a branded jacket is, and a gift card is not the safe, flexible choice it appears to be.
This guide covers the tax treatment, what to spend, and how late you can leave an order. We are a gift company, not an accounting firm, so treat the tax section as a map of the territory rather than advice for your specific situation.
Client gifts and employee gifts are two separate questions
Almost every mistake in corporate gifting comes from treating client gifts and employee gifts as one topic. In Canada they sit under separate rules that have nothing to do with each other.
- Employee gifts raise the question does this become taxable income for the person receiving it?
- Client gifts raise the question how much of this can the business deduct?
The thresholds differ, and so do the traps. Work out which question you are asking before anything else.
Gifts to employees: the $500 rule, and the trap inside it
Under the Canada Revenue Agency's administrative policy, an arm's-length employee can receive an unlimited number of non-cash gifts and awards in a year with a combined fair market value of $500 or less, including taxes, without any of it becoming a taxable benefit. Go over $500 and the excess, not the whole amount, becomes taxable.
Three details matter more than the headline number.
Small items do not count against the limit
The CRA excludes items of trivial value (coffee and tea, T-shirts, mugs, plaques, trophies) from the $500 calculation. Your branded water bottles in March do not eat into December's budget.
Long-service awards get their own $500
A non-cash long-service or anniversary award is tracked separately from the general limit, with its own threshold and its own conditions around minimum years of service and how often it can be given.
Cash and "near-cash" are always taxable, which is where gift cards go wrong
This is the trap. Cash and near-cash gifts are taxable in full, whatever the amount. Near-cash includes securities, precious metals and, the one that catches people out, most gift cards.
A gift card counts as non-cash only if all of these hold: it is usable only at a single retailer or an identified group of retailers named on the card; its terms state the balance cannot be converted to cash; and the employer keeps a log recording the recipient, the date, the reason, the card type, the amount and the retailer.
A prepaid Visa or Mastercard fails this immediately. The "easy, flexible" option a lot of companies reach for is therefore the one that quietly creates a taxable benefit and a payroll entry for every recipient, while a physical gift of the same value does not.
Which is the practical case for giving something real. A $150 basket delivered to an employee's home is straightforwardly non-cash, sits inside the $500 room, and creates no payroll work.
Gifts to clients: why a food basket is 50% deductible
The client side is where the surprise lives. Under section 67.1 of the Income Tax Act, expenses for food, beverages and entertainment are deductible at 50%. That rule is usually discussed in the context of restaurant bills, but it follows the food wherever it goes.
In general, the treatment breaks down roughly like this:
| What you send a client | Typical deductible portion |
|---|---|
| A basket of chocolate, coffee, snacks or other food | 50%, as meals and entertainment |
| A bottle of wine or a restaurant gift card | 50%, as meals and entertainment |
| A non-food branded item (apparel, a notebook, a bottle) | Generally 100%, as advertising or promotion |
Nobody is doing anything wrong by sending food. It is just worth knowing before the invoice reaches your accountant, because a $200 gourmet basket and a $200 branded jacket land differently on the return even though they cost the same.
The CRA also cares about records, so keep a recipient log: date, recipient, amount, business purpose. Without one, a reviewer can disallow the deduction entirely. Not reduce it. Disallow it. A single spreadsheet kept up through the year is enough, and far easier than reconstructing December from memory in April.
The mixed-basket question
If a basket contains both food and non-food items (chocolates alongside a candle and a ceramic mug, say), the honest answer is that treatment depends on how the expense is documented and how your accountant chooses to characterise it. An itemised invoice gives them something to work with; a single line reading "gift basket" does not. If this matters to your filing, ask us for an itemised invoice and we will provide one.
How much to spend
Budget questions get answered badly because people look for a single number. Think about the relationship, not the recipient's title.
| Relationship | Sensible range | Why |
|---|---|---|
| Broad team or client list, sent at volume | $70–$110 | Reads as generous at scale without becoming a budget line someone has to defend |
| Key clients, account holders, team leads | $130–$200 | The range where a gift stops being a gesture and becomes something they remember receiving |
| A closed deal, a milestone, a long-standing partner | $250–$360 | Reserved for the relationships that carry real weight, where restraint would read as indifference |
Two pieces of advice will save you more than the numbers. One good gift beats three forgettable ones; spreading a budget across more recipients almost always produces something nobody remembers. And keep the tier consistent within a group, because people compare. A team where three people received something noticeably better is worse off than a team where everyone received the same modest thing.
Why we do not send alcohol, and why that helps you
Velvéa holds no AGCO licence, so we sell no alcohol at all. For corporate buyers this turns out to be an advantage rather than a limitation.
Nothing needs to be signed for by an adult, so a gift can be left at a reception desk or a door without a failed delivery. Nobody is put in an awkward position either. For reasons of religion, health, recovery or simple preference, a bottle of wine is the one common corporate gift with a real chance of landing badly. And a growing number of organisations will not accept alcohol as a gift at all, which you rarely find out until after you have sent it.
If you have sent wine to a client list before, at least one of those baskets almost certainly went to waste.
When to order
The promotional-products industry tells you to start in July. That advice exists because branded merchandise needs artwork approval, sampling and a production run. Hand-packed baskets do not work that way, and you should not plan as if they do.
What limits us is capacity in December, not production time. Every basket is assembled by hand after the order is placed. At normal volumes that keeps the quality high; in the last three weeks of the year it makes the calendar tight.
| When you order | What to expect |
|---|---|
| Any time through October | Full range, full flexibility, no pressure on dates |
| Early to mid November | The right time for a December delivery run. Book the dates now, refine the list later |
| Late November | Still comfortable, but pick delivery dates instead of leaving them open |
| December | Workable for smaller lists and local delivery. Large multi-address runs get difficult |
For a single basket to a single address, none of this applies. Same-day delivery is available across much of the GTA on orders placed before the daily cutoff. The planning advice is for volume.
The logistics that trip people up
Multi-address delivery
Sending fifty baskets to fifty home addresses is a different job from sending fifty to one office, and it is the one most likely to go wrong. Collect addresses earlier than you think you need to: chasing the last four in the third week of December is the single most common reason a corporate gift arrives late. Send us the list and we handle the routing.
Remote and hybrid teams
Home delivery has become the default, and that changes what to send. A basket going to someone's kitchen can be more personal than one bound for a shared office table. Delivery windows matter less, too. Nobody is waiting at a reception desk at 4:55pm.
Cards
Every Velvéa gift includes a printed message card at no charge, and prices are never included with a gift. For corporate orders we can print the same message across an entire run, or a different one for each recipient. A message signed by a person beats one signed by a company; "From everyone at Northfield" is warmer than "Northfield Inc."
One invoice
Multi-address corporate orders are invoiced once, which is usually what accounts payable wants, and itemised on request for the reasons above.
Where to start
If you know roughly what you need, request a corporate quote and we reply within one business day with pricing and a delivery plan. If you are still shaping the idea, baskets for clients and baskets for employees are the two collections most corporate orders come from, and our corporate page covers volume pricing and branded cards.
This guide describes general Canadian tax rules as published by the CRA and is not tax advice. Thresholds and administrative policies change, and how they apply depends on your circumstances. Confirm the treatment of any specific expense with your accountant before you file.