Capital
Ottawa
Currency
CAD
Languages
English, French
Population size
38 million
Average Monthly Salary
~$2,800
Region
North America
Gift Giving Norms
Functional gifts, ships from EU warehouse
Major Corporate Gift Days
Christmas, Canada Day
Customs Complexity
Moderate
VAT - Standard Rate
5–15% combined GST/HST/PST
Duty Free Threshold
CAD$20 personal threshold
Ave Duty Rate
Varies by state
1. Employee Swag vs. Gifts
Under Canadian law, non-cash benefits provided to employees can be taxable if they’re personal rather than strictly work-related. The Canada Revenue Agency (CRA) sets the framework on whether items qualify as business tools or are deemed an employee benefit.
1.1 Swag for Employees
Work-Related (Generally Non-Taxable)
Uniforms & Essential Equipment
If branded apparel or specific gear is needed for daily roles (e.g., safety clothing, official uniform), it generally does not count as taxable income.
Branded Workplace Items
T-shirts, mugs, or pens with a noticeable company logo, consistently provided to all staff, can often be considered non-taxable corporate identity items rather than personal benefits.
Potentially Taxable Benefits
High-Value or Non-Essential Goods
Electronics, premium clothing, or other items with negligible job relevance can be seen as taxable income. Employers must then handle corresponding taxes (PAYE under federal and possibly provincial rules).
Frequent Gifting
Multiple gifts in one tax year may raise concerns over disguised remuneration. Local tax advice is recommended if you plan repeated employee gift distributions.
1.2 Gifts for Non-Employees (Clients, Partners, Event Attendees)
Tax & Deductibility
For Canadian businesses, deductions for corporate gifts often depend on whether the item is truly promotional/relationship-building in nature. Certain categories (like meals/entertainment) have specific rules, but general promotional gifts are commonly tax-deductible if documented.
Compliance & Anti-Bribery
Canada enforces anti-bribery laws, particularly in public sectors. Retaining records of high-value gifts is prudent, especially if recipients are in regulated industries or government.
1.3 Marketing Swag
Promotional Swag
Items (e.g., branded T-shirts, tech accessories) distributed at fairs or product launches typically qualify as marketing expenses, provided supporting evidence (invoices, distribution logs) indicates promotional usage.
2. Shipping, Customs & Duties
While Canada has a comprehensive trade agreement (CETA) with the EU, shipments from our European warehouse are subject to Canadian customs rules.
2.1 Shipping
2.2 Importing
Duties & Taxes
Canada applies import duties based on the Harmonized System (HS) classification. The Canada Border Services Agency (CBSA) assesses tariffs and Goods and Services Tax (GST) or Harmonized Sales Tax (HST), which importers must account for. Free Trade Agreements (e.g., USMCA, CETA) may reduce tariffs on eligible products.
Regulatory Requirements
Products must comply with Canadian safety, labeling, and bilingual packaging regulations. Certain goods, such as textiles and electronics, may require additional certification. Importers need an import/export business number from the Canada Revenue Agency (CRA).
Customs Clearance & Logistics
Goods entering Canada go through CBSA clearance. Many businesses use customs brokers to navigate tariffs and compliance. Shipments valued over CAD 3,300 require formal entry procedures, and delays can arise due to customs inspections or missing paperwork.
2.3 DDP vs. DAP
Delivered Duty Paid (DDP): The sender pays all import taxes/fees, ensuring straightforward receipt for Canadian recipients.
Delivered At Place (DAP): The recipient pays GST/duties upon arrival, risking delays or unexpected bills if not pre-informed.
2.4 With Monday Merch
We dispatch from our EU or USA facilities, and ensure an easy, tax-compliant process.
3. Cultural & Local Etiquette
3.1 Swag customs
4. Sustainability & Local Regulations
4.1 Sustainability & Regulations
5. HR & Employee Relations Considerations
5.1 HR & Employee Relations
6. Summary and Key Takeaways
6.1 Summary & Takeaways
7. Frequently Asked Questions
7.1 Questions & Answers
Does staff swag get taxed?
Branded, job-needed swag generally not taxed; personal-value gifts can be taxed as benefits.
What about swag for clients?
Deductible up to certain cost limits for genuine promotion—some specifics under CRA guidelines.
How do we deliver to Canada?
We ship from the EU warehouse; duties and Canadian sales taxes (GST/HST) apply on import above certain thresholds.
