Many thoughtful employers want to appreciate their Tax staff members with heartfelt gifts as the holiday season approaches. It shows compassion and reminds employees how much you value them. In addition, an appreciated employee will feel better about their work and might even be more productive.
Employee gifts are a lovely gesture, but they can turn into an accounting nightmare if you’re not careful. That’s because the IRS considers some employee gifts as compensation, and therefore they count as taxable income. When employers give items of considerable value to their staff, each employee is obligated to pay a tax on the total cost of the gift.
As a result, even when the employer wants to shower their staff with lavish gifts, the employee could face an unexpected tax bill because of this grand gesture. No one wants to worry about taxes during the holiday season.
You can avoid the holiday going haywire by using the IRS’s de minimis fringe benefits rule in your gift-giving. In accounting terms, de minimis gifts are so small that accounting for them is unreasonable or impractical. Luckily these tiny treasures can make a big difference in employee morale while being completely tax-free.
Here are six terrific tax-free employee gift ideas that fall under that umbrella, so you can show appreciation to your staff without creating a taxable headache for them during this special time of year.
Holiday meal gift certificates
Large family gatherings are usually a standard practice among many homes during the holidays. Because of that, the grocery budget for many homes increases drastically to accommodate larger meals for feeding everyone in attendance.
One terrific way to give back to employees is by providing them with turkey gift certificates or vouchers for ham. Gifting one of the most expensive parts of a holiday meal can help take the financial stress off your staff and ensure that they will have a tasty seasonal dinner for their family.
Not only does this gift show your employees that you are thinking of them and their families during the holidays, but it is also an untaxed benefit because it’s not exchangeable for cash and is infrequently given. Add one gift certificate to any company holiday stocking and let your employees know you care.
While many individuals associate flowers as a gift for women, they can also impress the gentlemen on your staff. Floral arrangements brighten up a room and create a festive ambiance. From large arrangements to seasonal wreaths and garlands, the options for a holiday-appropriate flower piece for your employees are vast.
Flowers fall under the classification of a de minimis gift. As an employer, you can brighten someone’s day without picking money out of their pocket.
A wristwatch is always in style and can be a complimentary gift for many executive staff members. This gift emulates class and sophistication and is always well-received. In addition, offering a wristwatch to employees as a de minimis gift can let them know how much you appreciate their hard work throughout the year.
This option can be allowable as a tax-exempt holiday gift, depending on your tax program and the total costs. So, if you want to make an impression on your employees this year, choosing a wristwatch may do the trick.
While on the subject of things that sparkle, you cannot ignore the idea of a jewelry de minimis gift. Anything with a lustrous nature is sure to delight your employee.
A jewelry gift does not need to be grandiose, flashy, or very expensive. Even a simple bracelet for women and a money clip for men can make their spirits bright. A thought like this will most definitely show appreciation for a job well done.
Books can be the perfect holiday gift this season because of the versatility to tailor to a specific niche. For example, if you run an investment firm, you could give a book on investing trends.
If that suggestion feels bland, you can always pick a fiction book with a storyline that falls under the same industry as your organization. Or you can tailor your choice to each employee’s specific tastes. A book that lets your employees explore a creative side with an appreciation gift is a win-win for everyone.
Tickets to an event
Who doesn’t want to see a hockey game or scream their favorite lyrics at a concert? Your personnel is no different. You could even go one step further and make it a company-wide outing.
For example, if Adele comes to your city, you could buy everyone in the office tickets for the holiday season. Not only does this fall under de minimis, but it also encourages more positive work morale and camaraderie for your employees.
De minimis win for all, and for all a goodnight
The holiday season can be stressful for business owners and staff alike. So in the spirit of giving, make sure that you choose an item that sends the right message while also minimizing your employees’ stress levels. Your employees will thank you, and your wallet will, too.