Published: June 2026 | Fact-Checked & Audited By: David Vance, CTA FCA (Chartered Tax Advisor & Accountant)
This guide is fully updated for the 2026/27 HMRC tax year. All calculations and tax rules have been audited against official UK legislation.
Not all workplace rewards arrive as cash in your monthly paycheck. Many companies incentivize staff using non-cash bonuses, ranging from retail gift cards and vouchers to company shares, Restricted Stock Units (RSUs), and non-cash perks like gym memberships. However, HMRC treats non-cash rewards as taxable benefits, and they are subject to strict valuation rules. To estimate your overall net earnings after tax and company deductions, use our online Bonus Tax Calculator. In this guide, we explore the tax implications of non-cash bonuses, how gift cards, share schemes, and RSUs are taxed, and how these benefits are reported in the 2026/27 tax year.
Tax on Company Gift Cards and Vouchers
The tax treatment of vouchers depends on whether they are cash vouchers (convertible into cash) or non-cash vouchers (redeemable for goods or services). In 2026/27, the rules are defined as follows:
- Cash Vouchers: If a voucher can be exchanged for cash, it is treated as standard earnings. The value is added to your PAYE payroll (modeled via our Income Tax Calculator), and both Income Tax and Class 1 National Insurance are deducted immediately.
- Non-Cash Vouchers: If a voucher can only be used to purchase goods (e.g., an Amazon or retail gift card), it is treated as a Benefit in Kind (BIK). BIK calculations are similarly modeled in tools like our Company Car Tax Calculator. The value is subject to Income Tax, which is typically collected by adjusting your tax code or reporting via a P11D form. Employers must also pay Class 1A National Insurance on these vouchers (estimated via our Employer NI Calculator).
The Trivial Benefits Exemption
Fortunately, small gifts from your employer can escape the tax net entirely under the **Trivial Benefits** rule. A reward is tax-free if it meets all of the following conditions:
- It costs the employer £50 or less to provide.
- It is not cash or a cash voucher.
- It is not a reward for performance or work completed.
- It is not contractual.
For example, a £40 supermarket voucher given to you for Christmas or your birthday is tax-free as long as it is not linked to performance. However, if that same voucher is given for meeting a weekly sales target, it is taxable, regardless of the value.
Taxation of Share Bonuses and RSUs
For many professionals, particularly in the technology and financial sectors, a significant portion of their bonus is paid in company equity. The tax rules depend on the scheme used:
- Restricted Stock Units (RSUs): When RSUs vest (when the shares are transferred to you), the value of the shares is treated as employment income. The employer must calculate the Income Tax and National Insurance due based on the share price on the vesting date. Typically, a portion of the shares is immediately sold (“sell-to-cover”) to fund these tax deductions.
- Share Incentive Plans (SIPs): If shares are awarded through an HMRC-approved SIP, they can be held tax-free, provided they remain in the plan for at least five years.
- Save As You Earn (SAYE): This scheme allows you to buy company shares at a discount. Any gain made between the option price and the market price is exempt from Income Tax and National Insurance.
Reporting Requirements: P11D and PAYE
Employers must report non-cash benefits to HMRC. This is done either through the payroll system (payrolling benefits) or by submitting a P11D form after the end of the tax year. If your employer uses P11D forms, you will receive a copy showing the cash value of the perks, which you must declare if you file a Self Assessment return.
| Reward Type | Income Tax Treatment | National Insurance Treatment | Reporting Method |
|---|---|---|---|
| Cash Voucher | Subject to standard Income Tax rates | Subject to Class 1 NICs (Employee & Employer) | PAYE Payroll |
| Gift Card (Non-Cash) | Subject to standard Income Tax rates | Subject to Class 1A NICs (Employer only) | P11D Form / Payrolled |
| Trivial Benefit (<£50) | Exempt from tax | Exempt from NICs | None |
| RSU vesting | Subject to standard Income Tax rates | Subject to Class 1 NICs (via Sell-to-Cover) | PAYE Payroll |
Frequently Asked Questions: Non-Cash Bonuses
1. Are gift cards from employers tax-free in the UK?
Gift cards are only tax-free if they meet the conditions for a Trivial Benefit, meaning they cost £50 or less and are not linked to performance or your contract. Any gift card given as a reward for work is fully taxable as employment income.
2. How are retail vouchers taxed when given as a bonus?
Retail vouchers that cannot be exchanged for cash are treated as Benefits in Kind, meaning you pay Income Tax on their value, and your employer pays Class 1A National Insurance. The tax is usually collected by adjusting your tax code or through a P11D form.
3. What is the tax rate on Restricted Stock Units (RSUs) in the UK?
When RSUs vest, they are taxed as standard employment income at your marginal rate of 20%, 40%, or 45%, plus employee National Insurance. This tax is usually paid by selling a portion of the shares on the vesting date.
4. Do I pay Capital Gains Tax when my RSU shares vest?
No, you do not pay Capital Gains Tax on the vesting date; you pay Income Tax on the share value. However, you may pay Capital Gains Tax later if you hold the shares after vesting and they increase in value before you sell them.
5. What is the trivial benefits rule?
The trivial benefits rule allows employers to give tax-free gifts of £50 or less to employees, provided the gift is not cash, is not contractual, and is not a reward for work. If any of these conditions are not met, the benefit is taxable.
6. Are shares received as a bonus subject to National Insurance?
Yes, shares in readily convertible assets (such as listed companies) are subject to employee and employer Class 1 National Insurance when awarded as a bonus. The value is assessed based on the market price of the shares on the date of transfer.
7. How do I pay tax on non-cash benefits?
Tax on non-cash benefits is usually collected through the PAYE system by reducing your personal tax code, or your employer may payroll the benefit directly. If not payrolled, the benefit is reported on a P11D form at the end of the tax year.
8. What is a P11D form?
A P11D form is a document that employers submit to HMRC to report any benefits in kind or expenses provided to employees during the tax year. You receive a copy of this form to help you complete your tax return or verify your tax code adjustments.
9. Are employee share option schemes tax-free?
HMRC-approved share schemes like Enterprise Management Incentives (EMI) or SAYE offer significant tax advantages, allowing you to acquire shares with reduced or no Income Tax and National Insurance. Unapproved schemes are subject to full tax when exercised.
10. Does my employer pay tax on my gym membership perk?
Yes, a gym membership provided by an employer is a taxable benefit in kind. You will pay Income Tax on the cost of the membership, and your employer will pay Class 1A National Insurance on the value.