Employee Gift Cards
Employee gift cards are a flexible and appreciated way for companies to reward their workforce. Whether used for recognition, motivation, or holidays, these cards offer convenience and choice.
These cards are a versatile and thoughtful way for companies to acknowledge the hard work and contributions of their employees.
What are employee gift cards?
Employee gift cards are a form of non-monetary incentive or reward provided by employers to recognize and appreciate the contributions of their employees.
These are typically in the form of prepaid cards that can be used at various retailers, restaurants, or for online purchases. The idea is to give employees the flexibility to choose a reward that suits their preferences, making the recognition more personalized.
Why do companies use employee gift card programs?
Employee gift card programs are used to motivate, reward, and recognize employees for their performance, milestones, or behavior. These programs:
- Improve morale and engagement
- Encourage consistent high performance
- Offer personalized and flexible rewards
- Are easier to manage than physical gifts or bonuses
Who can benefit from employee gift cards?
Any employee can benefit—whether through spot recognition, long-service awards, or holiday bonuses. Employee recognition gift cards are especially effective for peer-to-peer appreciation, team rewards, or manager-driven recognition initiatives.
When should you give an employee a gift card?
Gift cards can be given on various occasions:
- Work anniversaries or birthdays
- Hitting sales or performance targets
- Completion of large projects
- During the holidays
- As a thank-you for extra effort
Choosing the best gift cards for employee recognition often depends on the individual’s preferences and lifestyle.
Where can employers source employee gift cards?
Employers can set up a structured employee gift cards program through providers like:
- Empuls
- Amazon Business
- Giftcard.com
- Corporate gift card resellers
These platforms often offer bulk discounts and branded delivery options.
Are employee gift cards taxable?
Yes, employee gift cards are taxable in most countries, including the U.S. According to the IRS, gift cards are treated as cash equivalents, meaning they are considered part of the employee's income.
Do employee gift cards have to be taxed?
Yes, even if the gift card amount is small, employee gift cards have to be taxed unless they qualify under a very limited set of de minimis exceptions (like a holiday ham, not a $50 Amazon gift card). Always consult a tax professional for clarity.
Are employee gift cards tax deductible?
Yes, employee gift cards are tax deductible for the employer as a business expense, provided they are reported properly and treated as compensation when required. The cost must be documented and follow payroll tax reporting rules.
What is the taxable limit for employee gift cards?
There is no strict employee gift card taxable limit like there is with physical de minimis gifts. Even a $10 gift card is taxable unless the IRS or local tax law specifically says otherwise. Businesses should include the full value in the employee’s taxable wages unless exempted.
Employee pulse surveys:
These are short surveys that can be sent frequently to check what your employees think about an issue quickly. The survey comprises fewer questions (not more than 10) to get the information quickly. These can be administered at regular intervals (monthly/weekly/quarterly).
One-on-one meetings:
Having periodic, hour-long meetings for an informal chat with every team member is an excellent way to get a true sense of what’s happening with them. Since it is a safe and private conversation, it helps you get better details about an issue.
eNPS:
eNPS (employee Net Promoter score) is one of the simplest yet effective ways to assess your employee's opinion of your company. It includes one intriguing question that gauges loyalty. An example of eNPS questions include: How likely are you to recommend our company to others? Employees respond to the eNPS survey on a scale of 1-10, where 10 denotes they are ‘highly likely’ to recommend the company and 1 signifies they are ‘highly unlikely’ to recommend it.
Based on the responses, employees can be placed in three different categories:
- Promoters
Employees who have responded positively or agreed. - Detractors
Employees who have reacted negatively or disagreed. - Passives
Employees who have stayed neutral with their responses.
Can an employer give a gift card to an employee?
Yes, an employer can give a gift card to an employee, but they must treat it as taxable income unless it meets specific non-cash, low-value criteria. It’s a great way to show appreciation, but payroll should handle the tax correctly.
What are some creative employee gift card ideas?
Here are some employee gift card ideas that are popular and appreciated:
- Food delivery (e.g., Uber Eats, DoorDash)
- Streaming services (e.g., Netflix, Spotify)
- E-commerce (e.g., Amazon, Flipkart)
- Local experiences or restaurants
- Wellness and spa cards
- Fuel or transportation cards
These add a thoughtful and personal touch to recognition.
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