Trivial Benefits or Employee Perks? Choose smartly.
A guide for small businesses deciding how best to reward employees while keeping costs and compliance under control.
For small companies, choosing between trivial benefits and other perks is about balancing employee happiness, cost, and compliance. Here’s a breakdown of which option may be best for you.
What is the difference between trivial benefits and employee perks?
Trivial benefits are small, non-cash gifts costing £50 or less each that are tax-free if they are not a reward for work and not in an employee's contract (per HMRC). Traditional employee perks, such as health insurance or a company car, are usually larger taxable benefits in kind, reported on a P11D with Class 1A National Insurance due. Trivial benefits are cheaper and simpler; perks build longer-term loyalty.
Introduction
Attracting and retaining employees requires more than just a salary.
Small businesses must be smart about what they offer — and how they offer it — without breaking the bank or creating tax complications.
What Are Trivial Benefits?
Small, non-cash gifts provided by the company, such as:
- £50 Amazon vouchers
- Birthday meals
- Festive gifts
✅ Tax-free if under £50, not performance-linked, and company-paid directly.
For the full HMRC conditions, see our guide to tax-free employee perks under the trivial benefits rules.
What Are Traditional Employee Perks?
Larger or ongoing benefits provided to staff, examples include:
- Health insurance
- Gym memberships
- Company cars
- Paid training and development
✅ Generally taxed as a benefit in kind unless specifically exempt.
Comparing Trivial Benefits and Perks
Feature | Trivial Benefits | Traditional Perks |
Cost | Low (under £50 per benefit) | Medium–High |
Tax Treatment | Tax-free if compliant | Often taxable (benefit in kind) |
Admin Burden | Very low | Higher (P11D, Class 1A NIC) |
Flexibility | Very flexible | Often contractual or ongoing |
Morale Boost | Immediate, short-term | Longer-term engagement |
When to Use Trivial Benefits
- Budget-conscious appreciation
- Frequent small morale boosts — see how trivial benefits can lift team morale
- Celebrating life events (birthdays, milestones)
- Quick, easy, compliant rewards
When to Offer Larger Employee Perks
- Building long-term staff loyalty
- Supporting health, wellbeing, and work-life balance
Differentiating your company in competitive hiring markets
FAQs on Benefits and Perks
1. Can we use both trivial benefits and employee perks?
Absolutely — many companies combine them smartly.
2. Are trivial benefits enough for retention?
They boost short-term morale, but longer-term perks may be needed for retention over time.
3. What’s the main advantage of trivial benefits?
Cost-effective morale boosts without tax complications. You can read more on trivial benefits in the guide by HMRC here.
4. Is there a limit on trivial benefits for company directors?
Yes. Each trivial benefit must cost £50 or less, and directors (and other office-holders) of a close company are capped at £300 of trivial benefits per tax year, per HMRC. There is no annual cap for ordinary employees, provided each individual benefit stays within the £50 rules. For the current year's figures, see our trivial benefits rules for the 2025/26 tax year.
Thinking about how you reward yourself too? See our guide on how to pay yourself smartly as a director in 2025/26.
Final Thoughts
Small businesses don't have to choose one or the other.
Used wisely, trivial benefits offer regular touchpoints of appreciation, while larger perks help build deep loyalty over the long term.
The smart approach is knowing when and how to use each option to your advantage.
