Long Service Awards Guide for Employers

Long Service Award Guide for Employers

Lynsey May Sutherland
Lynsey Sutherland
September 27, 2023
6 min read

The longer your employees have been with you, the greater their understanding of your organisation and its unique goals and culture. Long service employees have so much insight, that it’s important to make sure they feel appreciated and acknowledged for their loyalty. An award is an excellent way to reward employees, enhance employee morale, and show your appreciation. That’s why our experts have compiled a long service award guide for employers.

Why are long service awards important?

Long service award schemes offer the perfect opportunity to show employees how much you appreciate their efforts. Employees who feel recognised and appreciated are much more likely to stick around. HR Today reported that recognition is key to employee retention. Awards for long tenure should be part of any robust employee recognition program.   

Our guide to long service awards for employers

Offering long service awards not only benefits employees, who get to enjoy being in the spotlight, it benefits your business too. A service award program is a great way to build employee loyalty and improve feelings of fulfilment. Both of which have a big impact on day-to-day performance and productivity. 

Two-thirds of employers already offer long service awards. For the program to be truly beneficial, it needs to feel like more than a simple box-ticking exercise. The more personal you can make your awards, the more impact they will have on the receiver. 

Long service awards ideas

Cash awards

A cash award can be a nice way to reward your staff. It gives people the freedom to put their award to something they truly want. The downside is that cash can also feel quite impersonal. Employees may begin to simply expect recognition after a certain number of years.

If you do choose cash awards, it’s a great idea to find other ways to recognise employee efforts and tenure. 

Non-cash awards

Some really fun non-cash awards are perfect little treats for employees. These can also be much more targeted and tailored than cash, by always choosing awards that have some significance. A few of our favourites include: 

  • Gift cards – There’s a much higher chance that employees will enjoy spending their award on something they want. This means they won’t risk losing it in the monthly bills. 
  • Vouchers – These are especially great if you know that someone has a particularly big purchase they’re saving for.
  • Physical items – This could be anything from the traditional pen or watch to something more unusual, like an exotic houseplant or a bit of sporting equipment. 
  • Experiences – From spa days to tickets to exciting sporting events or even a weekend break, experiences can make some truly precious memories. 

Workplace and Wellbeing Awards

You can also offer some awards that are tied to experiences in the workplace. These may be easier for you to budget for and some offer some really big benefits in terms of general wellbeing and happiness, these include things like:

  • Additional holiday days – These could be an annual benefit, if your organisation is able, or a one-off bonus holiday allocation the year of an award. 
  • Flexible work arrangements – You could reward long-serving employees with even more flexibility and freedom in their working arrangements.
  • Mentoring opportunitiesMentoring and coaching can be extremely valuable experiences for employees, especially ones who may be looking for new challenges. 
  • A reserved parking spot – Perfect for organisations where a parking spot could make all the difference. 

How to present long service awards

In addition to choosing the rewards themselves, be sure to have a plan in place for public recognition. Some people love public recognition at a company-wide meeting, others want nothing less. Either way, always make sure they get a mention in your company newsletter and a shoutout on your employee communication platform

No matter how you choose to present your awards, be sure that it’s as personal and meaningful as possible. 

Talk about the employee’s achievements and be specific about things they’ve contributed to or excelled at over the years. It’s also a nice idea to gather memories from colleagues, as well as ask them to sign a card and share any special photos they have.

Tips for creating a successful long-service award program

To create a long-service award program that’s truly successful, be sure to:

Get employee input

The only way to know for sure whether your ideas and awards are really meaningful to employees is to ask them!

Be creative with your awards

The more imaginative and fitting your awards are with your company culture, the more people will enjoy them.  

Make the program transparent and fair

It’s good to personalize awards, but it’s important to be clear about the levels and not show favouritism. 

Promote your program 

Employees will only be excited about receiving these awards if they know they actually exist. Promote the program and create a little fanfare when giving awards. 

Recognise employees throughout the year

Long service awards shouldn’t be the only time you’re showing your appreciation. Recognise your employees regularly to boost your program as well as overall engagement. Check out some thoughtful recognition ideas to spread throughout the year. 

Tax implications of long service awards in the UK

There are various rules governing tax implications of long service awards. For the full details, visit the government website.

Cash awards

Cash awards are typically considered taxable income in the UK. This means that the employee is required to pay income tax and National Insurance contributions on the monetary value of the award, this will normally be deducted as normal on payroll and they’ll be able to see any tax charged on their pay slip. 

For these, you must add the amount to your employee’s other earnings, and deduct and pay Class 1 National Insurance and PAYE tax through payroll. 

Non-monetary awards

Non-monetary awards, such as vouchers, gift cards, and physical items, are also subject to taxation. However, there is a tax exemption for non-monetary long service awards of up to £50 per year of service. So, employees are exempt from income tax and National Insurance payments on the value of the award, as long as it doesn’t exceed £50 for each year of service, and as long as you haven’t given them a long-service award in the last 10 years. 

To qualify for this tax exemption, the following conditions must be met:

  • The employee must have a minimum of 20 years of service with the same employer.
  • The employee should not have received a long service award from the same employer within the past decade.
  • The award must be valued at less than £50 for each year of service.
  • In cases where the non-monetary award surpasses £50 per year of service, the excess amount is subject to taxation as a “benefit in kind.”
  • Even if the award is tax-exempt, you must report the amount on form P11D.

You do have to report long-service awards if they are a part of a salary sacrifice arrangement.


Picture an employee who has dedicated 25 years to their employer. The employer presents them with a non-monetary long service award worth £1,250. For the first 20 years of service, the employee is exempt from income tax and National Insurance payments on the award’s value, up to £1,000 (£50 x 20 years of service). However, the remaining £250 is taxable, and the employee must pay income tax and National Insurance on that amount.

That said, a gift voucher of £50 can be given tax-free to employees as a bonus or award no matter how long they’ve been with you – as long as they aren’t part of a salary sacrifice arrangement.  

Responsibilities for Employers

Employers bear the responsibility of reporting long service awards to HMRC. This can be accomplished by including the award’s value on the employee’s P11D form.

Responsibilities for Employees

Employees are advised to maintain a record of all long service awards they receive. This makes it easier to calculate their income tax and National Insurance obligations.

In cases of uncertainty regarding the tax implications of a long-service award, it is advisable to seek professional guidance associated with tax rules.

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