If you give your employee two valid gifts or awards with a combined total fair market value of $700, a mug valued at $5, a valid long service award valued at $475 and finally, a gift of $200 in cash, the calculation would be as follows:

The $5 mug is of trivial value and is not considered a taxable benefit. As a result, it is not added in the calculation.

Step 1: Gifts and awards: Gift 1 ($250) and Gift 2 ($450)
The sum of all the items in column A ($700) - $500 = $200.

Step 2: Long service award ($475).
The sum of all the items in column B ($475) - $500 = -$25. Since the amount is less than $0, the total FMV of the long service award will be $0.

Step 3: Items that fall outside the gifts and awards policy: Gift - cash ($200).
The sum of all the items in column C = $200.

Step 4: Calculating the total taxable benefit.
The result of step 1 ($200) + the result of step 2 ($0) + the result of step 3 ($200) = a total taxable benefit of $400 that would be included on a T4 slip.