Employee Motivation and Retention
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Apr 01, 2003
In a reward and recognition program, what are the limits are for taxation of a benefit? In other words, if we award associates with gift certificates, is that taxable income? -- Suzan Walters
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According to our Human Resources benefits representative, any gift certificates valued at $25 or less are not taxable income. Gifts valued at $25.01 or more are considered taxable income for employees. -- Carol Hay, Pleasant Company
This is always a gray area, but in general, if an employee receives awards totaling $25 or more in a given year, they should be reported. For example, you cannot award someone four (4) $25.00 American Express Gift Checks and not report it. Compliance in this area is often spotty, but in large call center organizations, not doing it can be extremely risky. All awards, cash, non-cash, travel, etc. are considered compensation at some level, and should be reported. -- Michael Lesich, Excellis Inc.
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