---
title: "Non-taxable gifts and awards up to $500"
description: "Learn more when gifts and rewards can be considered non-taxable in accordance with CRA guidelines."
url: https://help.tedy.app/en/articles/50-non-taxable-gifts-and-awards-up-to-dollar500
collection: "For Administrators"
updated: 2026-09-21
language: en
alternates: [fr]
---

# Non-taxable gifts and awards up to $500

Learn more when gifts and rewards can be considered non-taxable in accordance with CRA guidelines.

### **When are employee gifts and rewards non-taxable?**

Under Canada Revenue Agency (CRA) policy, non-cash gifts and awards provided to employees can be non-taxable if specific criteria are met.

**Key CRA criteria for non-taxable status**

-   **Annual exemption limit:** Employers can provide up to $500 per year, including taxes, in total non-cash gifts and awards per employee without creating a taxable benefit.
    
-   **Gift vs. award purpose:**
    
    -   **Gifts** must relate to a special occasion, such as a holiday, birthday, or wedding.
        
    -   **Awards** must recognize an employee’s overall contribution or years of service. Awards tied to job performance, targets, or productivity are always considered taxable earnings.
        
-   **Non-cash rule and gift cards:** Physical items qualify as non-cash. A gift card may also be treated as a non-cash benefit only if it:
    
    -   Is restricted to an identified retailer or group of retailers;
        
    -   Cannot be converted into cash.
        
    -   **Note:** Prepaid Visa, Mastercard, and American Express cards are considered near-cash and are fully taxable.
        

Only the amount actually reimbursed counts toward the $500 annual exemption. For example, if an employee claims $1,800 from a $3,000 gift allocation, up to $500 may be non-taxable, $1,300 taxable, and the unused $1,200 would not be considered a benefit.

### **What’s the difference with Tedy reimbursements in general?**

-   **Allocation schedule:** Funds allocated on a regular calendar basis without being tied to a specific occasion are generally considered taxable.
    
-   **Category restrictions:** Restricting funds to specific categories, such as active living, home expenses, or groceries, does not make them non-taxable. Restrictions must typically also apply to specific vendors unless a separate CRA exemption applies.
    

The employer should review the program’s purpose, format, and restrictions with its accounting team or a tax professional. Tedy can help configure the categories and report reimbursed amounts, but the employer remains responsible for determining the tax treatment.

### **Official source**

-   [Canada Revenue Agency — Gifts, awards, and long-service awards](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits-allowances/gifts-awards-social-events/gifts-awards-long-service-awards.html)