Yet another thing that makes me grateful for my wonderful boss.... He gives nice bonuses at the end of the year (and periodically throughout the year, when I've had an especially productive month) and we have a nice "Christmas party" in December where we all go out to dinner. I guess it would be perfect if I got sick and vacation days.
It's really not up to the employer to decide what is taxable and what isn't. They weren't taxing these little bonuses, and legal and various government officials yelled at them. We now just get the cash (minus the tax), which obviates the point of getting something tangible but separate from our paychecks as rewards.
I don't like how the article is written - it isn't the employer's fault the government considered these things taxable.
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But it is up to the employer to decide whether it is "same as cash" and therefore subject to taxation....
Posts: 5879 | Registered: Apr 2001
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I'd think that the company would have someone that worked there that could have advised them that the cards would have been taxable.
I've heard of companies that calculate the taxes into the bonuses, so that the employees get the amount that they were promised (ie: a $500 bonus, and the company adds the tax amount to it so the employee sees the $500).
Safeway is generous enough to give us a 10% coupon for our xmas bonus. This is an improvement over last year when we were given coupons for a free deli sandwich.
I gotta tell you, when I think of my bonuses, all I can think of is motivation and pride. Posts: 851 | Registered: Oct 2001
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They found out eventually. I can hardly blame a company for not knowing the tax code inside and out.
I can tell you exactly how it happened. Someone within the company wanted to start a program with rewards, came up with the idea for the gift cards, the boss signed off on it and gave them a budget, and when payroll got wind of it through announcements, someone in payroll flagged it.
It'd have been better to check first, but if the people starting the program didn't imagine it might be taxable, they wouldn't even think to check.
I can't blame the company for this. It's not their fault the government wants to squeeze every last drop of blood.
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I work for a non-profit. Last year my Christmas bonus was a polo shirt.
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We generally get a 2% salary bonus and the period between Christmas and New Year's Eve off with pay, which always makes the holidays happy. Posts: 37449 | Registered: May 1999
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I dunno if St. Jude does Christmas bonuses or not; I've only been here since February. But it's a great place to work. I'm overpaid for what I do (don't tell my boss, though) and I get along well with everyone but the Non-Boss (self-appointed micromanagement specialist) - and even she's not that bad if I have sufficient amounts of coffee.
I have flexible hours, vacation, sick time and holidays, good benefits, my work is easy and I feel good about being here because I think it's a worthwhile place to be.
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So how are the regular gift certificates any less "same as cash" as the other gift certificates they will supposedly use in the future?
I just think it's really lame to say, "Here - we're giving you a $15 grocery gift certificate. And, oh yah, we'll be deducting $5+ from your paycheck next week because of it."
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Because the other gift certificates are not same as cash. They are the same as turkey.
It is lame (because someone didn't do their homework), but it's not stingy. They instituted a program and found bugs in it, so now they are changing it. It happens all the time.
Posts: 26077 | Registered: Mar 2000
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Yes. But the government taxes income, not increase.
Gift certificates are just money in another form. If it's not money if its all electronic, what's to stop people from giving out gift certificates to duck taxes?
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For starters, gift certificates generally only will let you buy in one store (or chain of stores).
I did a quick Google on Tower Automotive and from what I found, the company looks like it has at least 1,000 employees (one site said 12,000 colleagues) and if they're the publicly traded company (symbol TWR), they've got sales in excess of 2.5 billion a year.
Not exactly a small company in my book.
One thing I'm wondering is that if this was a new program, why didn't someone look into it more? I'm pretty sure that they've got an Accounting dept, and I'd expect them to be able to go over any new incentive programs.
Posts: 851 | Registered: Oct 2001
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