Have you ever noticed that every December, like clockwork, someone in the business inevitably asks the question:
“Can I accept this fabulous whiskey-themed gift basket?”
Suddenly you’re coming across as the Grinch – not because your heart is two sizes too small, but because your policy says no.
You can avoid this annual headache by reviewing your policy now.
Inflation is Not Your Friend
Inflation has not been kind to compliance, and people in the business know it. Many companies have outdated limits. If you haven’t reviewed your gift and hospitality policy recently, now’s the time to make sure it’s still fit for purpose.
Gifts, hospitality, and cultural norms don’t sit still. Neither do regulators.
Still, most companies want to stick with the pack. Here are some benchmarks to get you going.
🎁 What Counts as “Normal” These Days? (Spoiler: It’s Not Crazy Generous)
There’s no universal rulebook, but across industries, companies tend to orbit around the same basic numbers.
General Corporate Policies
Most companies land on $50–$100 per gift, with $100–$200 for entertainment.
This range shows up in sources from Forbes to Fisher Phillips.
Translation:
Enough for a nice holiday tin or modest team lunch—not enough for courtside tickets or a weekend at the Ritz.
The highest limit I’ve ever seen was at a trading company, where meals were allowed up to $250 per person without approval (non-government official). One of my Spark Compliance colleagues who used to work in financial services saw limits of up to $500 per person per meal, but that is a serious outlier in the corporate compliance world.
Financial Services (FINRA)
FINRA Rule 3220 pulls no punches: no more than $100 per person per year, period.
This is one of the clearest, strictest limits in any industry, and many financial-adjacent companies borrow it just to keep things simple.
Turns out FINRA is aware of inflation. In fact, it’s proposed upping the limit to $250. Stay tuned.
IRS Deduction Rule for Gifts and Entertainment
You can spend as much as you want on a gift… but your business can only deduct $25 per recipient.
The IRS is more generous with business meal deductions. Under most circumstances, the business can deduct 50% of the cost.
U.S. Government Officials: A Different Universe Entirely
If your company interacts with federal or state officials—even occasionally—the rules tighten dramatically.
Under federal ethics rules, employees generally may not accept gifts from prohibited sources. (example – Department of Energy) There’s a small exception:
- $20 or less per occasion,
- up to $50 total per year from the same source.
- Cash = always prohibited.
- State rules vary and are often even more restrictive.
The prohibitions and strictness of governments vary. Make sure you check the location’s rules before pushing out your policy.
What about U.S. states and interactions with government officials? This map is a fabulous resource for knowing the rules of the road.
How to Know Whether Your Limits Still Make Sense
A strong gifts and hospitality policy does more than list numbers. It should match your risk profile, culture, and business realities.
1. Who Are You Interacting With?
Government touchpoints = stricter limits, tighter controls, more pre-approvals.
2. What Types of Gifts Are Being Given?
Cash and gift cards? Almost always prohibited.
Branded mugs, books, and snacks? Usually OK.
Lavish entertainment? Big no.
3. How Often Are Gifts Exchanged?
One $75 gift may pass muster.
Four $75 gifts over the year? That’s not generosity – that’s a problem.
4. Where is Your Business?
I was in New York and London this year for business, and those bills added up fast. When sodas are being sold for $8 each, and appetizers begin at $27, the $50 meal limit dries up fast.
There are regional differences and if business is done primarily in a high-cost environment, that needs to be factored into the calculations.
Is this a Good FIT?
One client’s model is called FIT, and it’s a great way of thinking about the context of gifts and entertainment.
- Frequency– Does it repeatedly involve the same giver or recipient in the past year? Is the frequency reasonable given the value of the gift, entertainment, or hospitality?
- Intent- Is the intent to build the business relationship or something else? Is it consistent with applicable laws? Is the recipient permitted to accept it under his/her company policies?
- Timing– Is it given or received shortly before a business decision will be made that may benefit the giver or receiver? Is there a scheduled proposal, RFP, bid, tender, contract renewal/negotiation, or the like in progress at the time it is given or received?
The Bottom Line
Revisiting a policy is smart, and failure to do so can prove you’re radically out of touch with the business.
Gifts, entertainment, and hospitality can be wonderful relationship-builders… as long as they’re handled with clarity, consistency, and common sense.