Minimizing Your Taxes and Managing Your Complex Affairs

Tax Tips, Finance Tips, Fun Events

Tips for Individuals, Businesses and Charities. Fun Events.

Are Holiday Gifts to Employees Taxable?

Pretty much all payments to employees are tax deductible by the business.

Whether or not it's tax-free to the employee is a different issue.

De minimis fringe benefits are tax free to employees and thus employers save as they don't pay payroll taxes on this benefit.

Traditional holiday gifts (such as hams or turkeys) or birthday gifts of property with a low fair market value are considered to be de minimis fringe benefits if given on an infrequent basis to the individual employee.

This does not include gifts of cash or gift certificates, but does include flowers, fruit, books, or similar property given to employees under special circumstances, such as illness of the employee or family, family crisis, or outstanding performance on behalf of the employee.

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Richard Pon CPA, CFP