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Can I Give My Employees Gift Cards

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Can I give “tax-free” gifts to my employees?
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My Company Gives Terrible Gifts

Every year, my company picks out one corporate gift and sends it to all of us. Every year, it is terrible. One year they delivered hams to our homes, despite us having a fair number of vegetarians and Muslims on staff. One year they sent us all branded hoodies, which would have been fine except that they seem to have just guessed at peoples sizes and got them really wrong in a lot of cases. Mine would probably fit my toddler, but it doesnt fit me. Last year they sent us all gift certificates for a restaurant that was far away from where most of us live. Id rather receive nothing than these vaguely insulting gifts that seem to indicate no care went into picking them. Is it worth saying something or is it rude to complain about a gift?

Its rude to complain about a gift given in a social situation, but this is work and the rules are different. Your company is sending gifts in a hope that it will increase staff morale and make people feel more connected to the company. If theyre failing at that , its useful for them to know that.

Top 10 Gift Cards For Employee Rewards

The best gift cards to give your employees to reward them and recognize them for a job well done! Employee Appreciation Day is March 5, 2021.

Need bulk gift cards? Visit GiftCards.com For Business to get started.

According to an article in Entrepreneur Magazine, Every company needs a strategic reward system for employees that addresses these four areas: compensation, benefits, recognition and appreciation. The author goes on to say that while many companies adequately provide compensation and benefits, they often struggle to provide proper employee recognition and appreciation. One of the oversights is not rewarding behaviors they want to foster within the company or expressing adequate appreciation for a significant contribution. Having been an employee for more than a handful of companies, I agree that Ive felt more valued by some employers than others, despite a consistent performance level.

From personal handwritten notes of thanks to public commendations for a job well done, there are many ways to let your employees know they are valued. Gift cards, of course, are one of the most popular ways to give staff a little bump without too much expense. If you are planning to give gift cards to employees as holiday bonuses, thank you gifts, gifts of appreciation and so forth, check out my list of Top 10 Employee Reward Gift Cards below.

Theres a little something for everyone with a few suggestions on how to make these awards even more meaningful.

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Office Gifts For Employees

Its tricky giving gifts that are overtly office related. You want to tread carefully when offering items that might appear to project a hidden agenda or send a passive aggressive message, such as a box of mints for employees with halitosis, for example.

But at the same time, the office is where most desk workers spend their time. Any of the gifts below can be found online, and can brighten up a workstation, whether its a home office or in a shared location.

Depending on how many employees you have, or the size of the gift you want to give them, you can always mix and match from the items below to create custom gift baskets.

All The Coffee They Want

Can I Give Tax

More people than would probably care to admit it need their first cup of coffee just to be a person in the morning. If thats your employees, consider giving them a french press and travel mug in one.

This lets them brew and carry in the same container. If they dont have the brain cells to operate electronic equipment until they have some joe in their system, the simple french press mechanism makes single-serving coffee easy. Then it goes right on the road!

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Is It Appropriate To Give My Intern A Gift

What is appropriate when gifting to interns? In my case, I have a graduate-level intern whose placement is required for her degree who works directly with me. When I did required internships at both the BA and MA level, I received anything from small gift cards to the same holiday bonus as the full-time staff . Is gifting to someone who is technically your student appropriate? Im thinking about the $5 to $10 Amazon, Starbucks, or Target gift-card route, but what are your thoughts?

A small gift card to a place you know she likes is a great gift.

Also, keep in mind that the $100 check you received was a bonus that came from the company, not a gift from your manager personally. People dont expect extravagant gifts from their managers, even if the company itself goes a more luxe route. And frankly, managers dont need to give their staff gifts at all, although its a thoughtful gesture if you choose to.

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Is There Tax On Gift Card

Yes, gift cards are taxable. According to the IRS, gift cards for employees are considered cash equivalent items. Like cash, you must include gift cards in an employees taxable incomeregardless of how little the gift card value is.

But, there is an exception. You might be able to exclude gift cards you give employees for a specific item of minimal value . Check with a tax professional if you have questions about whether you need to withhold taxes on gift cards.

For all other gift cards, record the value and pay the appropriate amount of taxes.

Now that you know gift cards are taxable, you can avoid making the mistake of giving them to employees without first withholding taxes. Worried about making other payroll errors? Check out our FREE whitepaper, 10 Common Payroll Mistakes You Dont Want to Make, to help you stay compliant.

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Virtual Gifts For Employees

Virtual gifts for employees are online items that dont require shipping to create a sense of celebration and make employees feel special. These corporate gifts are important to send on special occasions when youve run out of time to make a physical purchase but still want to send a meaningful gift.

Gift Cards Go Easy On The Environment

10 EASY WAYS TO EARN FREE AMAZON GIFT CARDS (AND MORE)!

We surveyed employees about their feelings on company swag earlier this year and only 17% of respondents noted they use all the company swag they are sent. Our swag partner, AXOMO found that 52% of swag is thrown away or re-gifted. Thats a lot of swag sitting there unused or in a landfill. The beauty of a digital gift card is there is literally no waste. There are no CO2 emissions related to production, packaging, or shipping. And gift cards are redeemed for items an employee wants, resulting in fewer returns and environmental impact associated with returns. There are still sustainability issues with plastic gift cards. They are made from PVC and are difficult to recycle. But many companies like Apple and Whole Foods are moving to paper-based gift cards, which are easily recyclable. Bonuslys gift cards are fulfilled digitally, which means your employees get instant gratification and no plastic goes into the landfill!

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Tax Rules Of Employee Gifts And Company Parties

Taxable gifts: Gift certificates are wages subject to taxes — even for a de minimis item. For example, a gift certificate for a turkey is taxable, even though the gift of a turkey is not. Cash gifts of any amount are wages subject to all taxes and withholding. Gifts Under $25: Gifts under $25 are typically tax-exempt.

Chocolate Truffle Making Kit + Class

  • What is it? A team building event for employees who have a sweet tooth. This shippable experience provides all the materials and guidance necessary to make delicious chocolate truffles with your team.
  • Why employees love this shippable experience gift: The hands-on aspect of this virtual event makes it fun whether they are making homemade ganache, decorating their truffles, playing trivia and games, and of course chopping down on chocolatey goodness.
  • Customizable? Yes

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The Gift Of Gift Cards: De Minimis And Reporting Rules

However, if your organization gives gift cards to staff, there are steps you must follow to ensure youre compliant with IRS rules. Are Gift Cards Taxed? Gift cards given to employees count as taxable income and must be reported on Form W-2, but people often incorrectly assume that gift cards are covered under de minimis fringe benefit rules.

Flexible For Any Budget And Occasion:

Pin by Artsy

The perfect thing about gift cards compared to physical rewards is that they can be tailored to fit your budget, whether you want to spend £10 or £100. You could treat all your teams to a coffee on a Friday with a gift card to a coffee shop, or if you wanted to say Happy Birthday to a long-standing member of your team you could treat them to a voucher, they can spend on a restaurant to celebrate.

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Why Gift Certificates Are The Right Gift For Staff Members

Its difficult and overwhelming enough to figure out what to give people for holidays and other momentous occasions throughout the year. So, it makes sense why you might be scratching your head and wondering what you should buy for your talented staff. You might believe that slapping your company logo on a t-shirt is enough to show your immense gratitude. And sometimes corporate swag is great! However, gift certificates could be the most viable solution for you and your staff. Interestingly enough, 69% of workers say they would appreciate receiving a gift card from their employer. Many also would enjoy a cash award to acknowledge a job well done.

When you give gift cards, your staff members can:

  • Choose what they want to buy rather than have someone choose for them
  • Snag better deals by shopping during special sale times.
  • Enjoy more flexibility and decide when they use their pre-paid money.

Benefits of Employee Recognition and Rewards

Many brands are making the mistake of not recognizing individuals and ignoring their achievements. Gift giving is an industry best practice! Did you know that 44% of employees leave their current job because they dont feel recognized? Thats a staggering statistic, but the good news is that its one that a simple rewards program can fix!

Consider the advantages of corporate gifting:

Gift Cards Are Taxable

the aforementioned gift card log to Jennifer Martinka in the Business Office. If the recipient is an employee, the gift card amount will be added to the employees W-2 at the calendar year end, and both employee and employer portions of FICA taxes owed on the card amount will be charged to the issuing department.

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Employee Allowances And Reimbursements

You also provide employees with nontaxable allowances and reimbursements, such as for the business use of a vehicle, provided you follow the CRA’s per-kilometer allowance guidelines. Nonreasonable per-kilometer rates will be considered a taxable benefit.

Payments for travel expenses, such as meals, for activities conducted on behalf of the business also are allowed. Employees must keep track of the expenses and submit an expense report, with receipts, to the employer. Employers may give employees an advance for expenses.

    How Much Money Could My Business Save Using Gift Cards As A Trivial Benefit

    How to Pay on Amazon Using a Gift Card

    You can use giving gift cards or vouchers as a trivial benefit to your advantage. Adhoc gifts that go through payroll may end up getting mixed up in tax and national insurance. However, presenting these items as a gift card makes it a lot easier to identify the trivial benefits, against the non-trivial benefits. Plus, by recording these correctly, you could save your business up to £48.10 each time! Total cost for your business £98.10 £50 Saving/loss for your business – £48.10 £0

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    Can I Send A Gift To A Potential Employer

    A manager at a previous job who I used to work with recently gota promotion. Shes in the process of adding personnel to her department, and reached out to me about bringing me back to the company to work for her. Its a great opportunity, but she wont be able to interview me until January. Is there anything wrong with sending her a small Christmas gift?

    Dont do it! Because shes considering you for a job, its too likely to look like an attempt to curry favor. And its likely to make her feel uncomfortable, especially if she ends up not hiring you. If you want to send something, stick with a holiday card.

    Think Twice About Gifting Gift Cards

    Answer: Yes! Gift cards often seem like a quick and easy gift, but you must remember the Internal Revenue Service considers gift cards to be additional compensation, and thus, taxable income. Gift cards have value and are essentially cash to a store of some kind. Whenever cash is exchanged, it is a taxable transaction to an employee.

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    How To Provide Employee Gifts As Tax Deductions

    Employers can give anything theyd like to their employees as a gift, but its important to understand the tax implications. Typically, employers avoid giving an employee a gift that comes with substantial taxation without the employees knowledge. Consider these steps when determining what tax-free gifts you might provide:

    Can I Give Gift Cards As A Trivial Benefit

    Back to school gift for teacher {Free Printable}

    Many businesses give gift cards and gift vouchers to employees as a reward or incentive. What companies often dont realise is that some of these gift cards could be recorded as a trivial benefit, which means youd save your business money on tax and national insurance payments. If you give gift cards to your employees for occasions such as birthdays and Christmas, then you can, and you should, be giving them as a trivial benefit not a benefit-in-kind. Dont get caught out however with cash based gift cards, for example prepaid Mastercards. These will come under HMRCs it is not cash exempt rule. There are plenty of occasions where you can give your employees a gift card, up to the value of £50, and record it as a trivial benefit:

    • Easter gifts
    • New job and farewell gifts
    • Welcome gifts for new employees
    • Lunch, dinner or drinks with colleagues
    • Refreshments out of the office, such as coffees and teas
    • Purchasing new work attire ahead of new business pitches or events
    • Bank holiday treats

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    Tax Implications Of Gift Giving In The United States

    Almost any gift you give an employee in the U.S. is subject to income tax.

    For example, a $500 iPad given as a gift could cost an employee up to $200 in taxes if claimed legally, which does little for increasing employee happiness.

    Most gifts are seen as taxable benefits for your employees, which means they will be taxed on them and the values will need to be included in your employees year-end forms.

    The Internal Revenue Service says when it comes to taxable fringe benefits, The benefit is subject to employment taxes and must be reported on Form W-2.

    Tax Free Gifts To Employees

    Fortunately, a statutory exemption from income tax and national insurance for employees and employers exists thanks to the trivial benefit rules. The current form of these rules took effect from 6 April 2016, and the key conditions are: The cost of the gift, including VAT, does not exceed £50 per employee.

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    Should You Buy Gifts For Your Employees

    Maybe this is your first winter in a supervisory position. In addition to worrying about meeting year-end goals, you might have the added stress of figuring out whatif anythingto give your employees for the holidays.

    Some people will tell you that you dont need to buy your employees gifts , and while I do think thats your prerogative, Im a big fan of gift-giving, so heres some guidance should you decide to go that route:

    Check out these articles for even more advice on gift-giving at work.

    Watch For Gifts Forming A Series

    The American Express Business Gift Card – An Effective Tool for Rewarding Employees and Customers

    While the general rule is that there is no limit on the number of individual trivial gifts that can be given to an employee in any one year – provided each gift individually qualifies for relief there are rules which prevent an employer trying to divide a larger gift into several smaller ones.

    HMRCs latest Employer Bulletin highlights how while providing a gift card of £10 would initially fall within the trivial benefit rules, topping up the same card with £10 more than four more times in the tax year will take the total of the benefit over the £50 limit. In that case, the whole series of gifts will be considered a single benefit which then fails to meet the trivial benefit conditions so both the original gift and the top-ups will be taxable.

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