Gift cards given to employees must be included in taxable wages.
‘Tis the season of spreading good cheer and many of you may be celebrating by generously giving gift cards to your employees. At the risk of sounding like Ebenezer Scrooge, we need to remind you that gift cards – whether for merchandise, services, or cash (like a VISA card) – count as taxable wages.
Please report the value of the gift given and we will clarify if you want the employee’s pay grossed up or taxes withdrawn from the employee’s check as is.