Why every company needs an employee gifting programme
Tax note (Estonia, 2026): the tax rules mentioned in this article apply to companies registered in Estonia. A promotional gift to a client or partner is free of income tax up to 21 € excluding VAT; above that, the full value is taxed (22/78). For VAT a separate 10 € threshold applies: if the value exceeds 10 € excl. VAT and input VAT was deducted, the free transfer is a taxable supply. Gifts to employees are generally fringe benefits. Taxation depends on the specific transaction – check the current rules with EMTA (EMTA (English)) or your accountant. If your company is registered in another country, local rules apply.
Most people would agree that finding and keeping good employees is becoming harder every day. One tool that helps you keep employees loyal is promotional gifts. They bind employees more closely to the company, help save on training costs and indirectly encourage departments to work together better. That is why every company can benefit from an employee gifting programme.
Too good to be true? Let me explain.
Employee gifts in the hands of HR
I increasingly see that ordering business gifts has been entrusted to the HR manager or HR department. This is a very good idea, because business gifts effectively increase employee loyalty and help retain people in the company. That in turn means savings on recruiting and training new staff.
A potential employee forms a first impression of the company as early as the recruitment process. Even a small keepsake such as a ballpoint pen or another small item creates a positive image of the company.
Clothing with the company logo helps new employees fit in
Clothing with the company logo helps a new employee become part of the team more quickly and gives them the feeling that they matter to the company. At the same time, it introduces them to the company's values.
It also makes sense to use photos of employees wearing embroidered company clothing on social media and on the company website, as this too helps build a positive image.
Giving corporate gifts to employees pays off in the long term. You could say that it also brings departments closer together.
Recognition motivates – and saves money
Recognition motivates employees, and a company keepsake that is genuinely high-quality and useful to the employee is one of the most affordable ways to show it. It is best when the gift is personal and connected to the employee's interests – it shows that you care about what they do.
Your employees are also the first to give feedback on your choice of promotional gifts. They will tell you straight away whether a product that seemed a good choice to you actually appeals to people. That is why I commend every company that involves its HR department in selecting promotional gifts.
A recognition programme saves you money in the following ways: a motivated employee is more productive and more loyal, and you save on recruitment and training costs.
How an employee gifting programme works in practice
We recommend introducing a recognition programme that several of our long-standing clients use successfully. These are tried-and-tested solutions, but they need to be applied consistently.
- During recruitment, candidates receive a small contact keepsake.
- On starting work, the employee receives workwear, a branded shirt, a fleece or another personal gift – for example a welcome gift set.
- Employees are remembered with a company keepsake on their birthday.
- A gift can also be given for defending a degree or completing a major training course.
- A keepsake is given to those reaching a milestone work anniversary.
The budget for each stage can range from inexpensive contact keepsakes to more valuable anniversary gifts. Bear in mind that under Estonian rules, gifts to employees are generally treated as fringe benefits and taxed accordingly, so include the tax cost in your plan.
Based on the experience of our long-standing clients, we can say that such a programme really works – and we are happy to recommend it to you too.
Logotrade is a member of the international promotional products networks PSI and ASI and of the Estonian Chamber of Commerce and Industry.
Every well-chosen promotional gift in Jõhvi or anywhere in Estonia is part of recognition. Browse our product range, branding services and blog, or contact us.