Giving Christmas and New Year Gifts

The Labor Law in Article 119. Paragraph 2. provides the possibility for the employer to provide a gift to the employee’s children, who are not older than 15 years, for New Year’s or Christmas. The mentioned legal provision represents only a possibility but not an obligation for the employer to provide a gift to the employee’s children. Also, the value and form of giving the gift (New Year’s package or money) is determined by the employer.

The possibility of giving gifts for New Year and Christmas does not have to be provided for in the Employment Contract concluded between the Employer and the Employee.
Instead, it is possible to issue a separate Decision on granting New Year gifts to employees’ children, signed by the legal representative, for example. director. On that occasion, it is necessary to specify for which children the gift is provided (children of which employee, born in marriage, out of wedlock or adopted, age…), the value of the gift, the form of giving the gift (e.g., New Year’s package) or the time and place of gifting.

If both parents are employed by the same Employer, it is considered that such a child is entitled to 2 gifts, one of which would be based on the employment relationship between one parent and the employer and the other between the other parent and the employer, given that both parents have equal rights and obligations from the business relationship. Also, these gifts (if given in accordance with the prescribed conditions) do not represent the Employee’s salary, nor can their value be deducted from the Employee’s salary.

What makes such gifting attractive for the employer is that in this case, no payroll tax is paid on employees’ income based on gifts to children (of course, if the age condition of the children is met and if it is a one-time, New Year’s and Christmas gifting) up to the amount of 12,544.00 dinars annually per child. The amount is variable, and the stated amount is valid at the time of writing this text. until 01/31/2024 year. If a gift is of greater value than the above-mentioned amount, the difference in amounts is taxed as the employee’s salary.