Finnish service since 1989Fast quote, no commitment

Get in touch
Prices
Turun MainostuotePromotional products for companiesQuote basket

Retirement gift for an employee: taxation and gift ideas

· Piia

A retirement gift for an employee is a thank you for the years they have given to their workplace. When an employer chooses a gift for an employee retiring it is worth checking at the same time whether the gift stays tax-exempt or becomes taxable salary. The line is not difficult, but a few conditions decide which side the gift falls on.

The Finnish Tax Administration's guidance Staff benefits in taxation tells what kind of a gift an employer can give on a special occasion without tax consequences. Below we go through the conditions for tax exemption, the situations where the gift becomes salary, gift ideas by years of service, and how a gift bought together by coworkers differs from an employer's gift. The guidance is useful for supervisors and HR as well as for colleagues planning a joint gift.

When a retirement gift is tax-exempt

The Tax Administration treats moving into retirement as one of the customary special occasions. The same group includes 40th, 50th and 60th birthdays and at least ten years of employment. A gift given on a special occasion can be tax-exempt for the employee when its value stays reasonable and the other conditions are met.

According to the guidance an employee's special occasion gift has its own value limit: the reasonable value of the gift is at most an amount corresponding to 1–2 weeks of the employee's gross pay. The limit is therefore personal, because it is determined by the recipient's own pay. For two employees retiring in the same spring the limit can be different.

Tax exemption also requires that the following conditions are met:

In practice the conditions mean that it is worth agreeing at the workplace how people retiring are remembered and following the same way in every case. A written practice also makes the supervisor's and HR's work easier, when the gift is not a separate decision every time.

Before choosing the gift the supervisor or HR should go through a few questions. Is the retirement date known? Has the workplace agreed on a way to remember those retiring? Does the planned gift fit within the value limit set by the recipient's pay? When the answers are clear the gift can be chosen without checks to be made afterwards.

A special occasion gift is a different thing from a minor gift, which the employer can give to the staff in another context. About minor gifts the guidance says: "The value of a minor gift can be at most EUR 100. If the employer gives the employees a few minor gifts a year, their combined value can be at most EUR 100." The special occasion limit applies to a retirement gift, but the value of a gift card is counted towards the minor gifts limit, as the next section tells.

When the gift becomes salary

The gift becomes taxable salary when one of the conditions for tax exemption is not met. The usual situations are these:

If the gift is salary it is taxed as salary. That is why it is easier to choose an item that already meets the conditions than to sort out afterwards how the gift is handled. An item is also a more personal gift than a sum of money or a card.

Value added tax is covered in more detail in the article Corporate gift taxation: promotional gifts and business gifts: staff gifts are not treated as customary promotional gifts, so their VAT is not deductible, but the costs are deductible in income taxation.

The general rules for staff gifts, such as minor gifts to the whole staff, are collected on the page Staff gifts.

Gift ideas for someone retiring

A good retirement gift is an item that stays in use and reminds them of their working years. Engraving or printed text makes an ordinary product personal: it can carry the recipient's name, the years of service or the company's logo. The value limit is always determined by the recipient's pay, but the years of service help choose the character of the gift. It is also worth thinking about what the recipient plans to do in retirement: a traveller, a summer cottage owner and someone who enjoys being at home are pleased by different things. You can ask coworkers for tips if the recipient's hobbies are not familiar.

Ideas by years of service:

On steel products the logo is usually engraved with a laser, and the engraving is one colour. A one-colour engraving suits a restrained look where the name and the years are the main thing. A pen set and a thermos flask are typical engraved gifts.

The engraving text is worth keeping short. The recipient's name, the years of service and a short thank you are enough, and from them the recipient can easily recognise the story of the gift years later. If the gift carries the company's logo, consider where to place it so that the name stays the main thing.

The same product groups are also used for remembering customers and partners, and the page Corporate gifts and client gifts tells more about them. Gift ideas for different occasions are collected on the page Gifts for businesses.

State the desired delivery date in the quote request. The exact lead time is stated in the quote. Before production you receive a print proof to approve. Production starts once the proof has been approved. You will receive a quote within one working day, and the request does not oblige you to order.

A farewell gift for a coworker

Often the gift does not come from the employer but from coworkers. Colleagues collect money together and buy a gift for the coworker who retires or leaves the company. Then the situation is different from the employer's gifts described above.

When coworkers give the gift themselves it is not the employer's staff gift. The employer's own gifts to the staff follow the rules described above, and the general rules for staff gifts can be found on the page Staff gifts. If the employer gives its own gift and the coworkers theirs, they are two separate gifts.

Small individual gifts suit a joint gift. The same product groups work here too: an engraved pen set, a thermos flask or a blanket with the coworkers' greetings attached. You can also order small quantities from the same product groups, and the steps of ordering are collected on the page How to order.

The collection runs smoothly when one coworker gathers the money and the greetings and handles the order. Choosing the gift is easier when the collector knows what the departing coworker likes: a hiker is pleased by a thermos flask, a book lover by a blanket and a writer by a pen set.

A good joint gift shows that the work community has noticed the person and not only their working years. A card where everyone writes a few words goes well alongside the gift.

Sources

The guidance was checked on the Tax Administration's website on 14 October 2026.

Frequently asked questions

How valuable can a retirement gift be?

According to the Tax Administration's guidance the reasonable value of a special occasion gift is at most an amount corresponding to 1–2 weeks of the employee's gross pay. The limit is therefore determined by the recipient's own pay.

Can a retirement gift be given as a gift card?

Yes, if the card is given to a named employee, its use is limited to goods or services obtained from a specific place and it cannot be exchanged for money. The value of the card is counted towards the minor gifts limit. Otherwise the gift is taxable salary.

Is a gift bought together by coworkers the employer's gift?

No. When coworkers collect the money and give the gift themselves it is not the employer's staff gift.