The title, The Happiest Place on Earth has been awarded. You could be 2nd to the mouse, at least in your Employee’s eyes. Offering an extra paid day off during employee’s birthday month, or a gift certificate to a favorite restaurant, or maybe a bonus for a trivia contest you have ongoing. What about a promotional product that serves as a gift and promotes your business? There are also non-monetary gifts.
All of these are great ideas to keep your employees engaged and enjoying the environment they come to every day. Now you just need to run it past the IRS to get their two cents worth. “What? The IRS needs to know about me being kind to my Employees?” Yes, of course the IRS needs to be involved. The HR department quite possibly also. See this publication for your leisurely reading, or contact your CPA or Tax Advisor or HR consultant, is the better plan. The employer/employee tax, state tax where applicable, as well as determining if this gift is deductible to the business all need to be taken into consideration. Don’t let the tax scenario’s make you lose sight for the act of kindness and become the Grinch. You simply want to stay between the boundaries. Finally, possibly most important, you need to look at your budget to ensure this act of kindness, is achievable and purposeful, whether one time or ongoing.
Take this 3-question test when considering your act of kindness
Does this bring joy to the recipient? If you answer yes with no hesitation, great, you passed test 1. If it is more self-serving, better do some soul searching.
Will this be an equal and fair process, so all employees are eligible to meet the requirements? Again, refer to question one. Eagerly answering YES passes test 2.
Does the budget allow this additional expense? If you answer yes, in a less confident manner, maybe you need to rethink your plan before you pass test 3. It doesn’t mean you have to scratch it all together, you just need to revise to fit your budget. Instead of sending one employee a month on a week- long vacation (Can I work for you!), maybe you start with one extra day off (virtually costs nothing, right) with a gift certificate to their favorite place. Setting a dollar limit on the gift card would be best practice policy.
It is most often this time of year, that we take time to remember all the good people who surround us, lift us up, and help your company survive and thrive. Being kind takes as much energy as the alternative. Choose kindness, all year round!
Unsure how to stay compliant with your business finances? Do you need your budget reviewed to plan your acts of kindness and other expenses? Contact your local bookkeeper who will kindly guide and assist you to ensure you are following all the rules when spreading kindness throughout your company.