As the year wraps up, many leaders start wondering about employee bonuses or gifts for Christmas and how to meaningfully appreciate their team after a big year. And honestly, it’s a fair conversation to have. Teams are tired, the year has been big, and a little recognition can go a long way.
But here’s the thing. There’s no one “right” answer. What matters is being thoughtful, consistent, and aligned with your culture.
Bonuses: The crowd-pleaser (with expectations attached)
Bonuses are always appreciated, especially during the festive season when everyone’s wallets seem to empty faster than usual. They’re a great way to reward a big year, acknowledge strong performance, or share the wins of the business.
The catch? Bonuses can quickly become expected. If you give one every year, employees might start seeing it as part of their pay rather than a genuine “thank you.” And in a tougher year financially, pulling back can feel awkward or even demotivating for staff.
Bonuses can also be a minefield for the business owner, especially in smaller businesses. For example, the business owner provides bonuses and then gets no thank you from the team, resulting in them considering skipping bonuses the next year!
Gifts: More personal, less pressure
Christmas gifts can be a lovely gesture. Something small, thoughtful, and reflective of your brand or culture. A great bottle of wine, a locally made hamper, a handwritten note, or even extra leave can hit the mark without creating long-term expectations.
The key here is avoiding the “obligatory corporate gift” that ends up in the back of a drawer. If you’re going to give a gift, make it meaningful or at least genuinely useful.
So… what’s the best approach?
It really comes down to three things:
- Your business’s financial position - Don’t stretch yourself thin just to keep up with other companies or to match what you might have done last year. This is particularly difficult when you have a small team who have worked hard for you – and may take it personally if a bonus is missed (this affirms that the bonus has become expected).
- Your culture – Are you a “celebrate the wins loudly” kind of team, or more understated?
- Your consistency – Whatever you choose, be clear about it. If it’s a gift, call it that. If it’s a bonus, communicate how it’s earned.
At the end of the day, employees simply want to feel appreciated. Whether that’s through a bonus, a gift, a heartfelt thank-you speech at the Christmas party, or an extra day off, the goal is the same: acknowledge the humans who keep your business running.
A thoughtful gesture - whatever form it takes - always lands better than doing something just because “we always have.”
Just a quick note, the ATO also outlines fringe benefit considerations here that you should factor into your decision
If you need help figuring out what will make the most sense for your business this year, reach out to our team for some advice because as always, we are here to help.
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