Giving a Little Holiday Cheer
Holiday Gifts for Team Members
As we near the end of the year and the holiday season, you may be considering what type of gift or bonus to give your team for all the hard work they have put in over the last 12 months.
In our experience, we find that practices who use a bonus system that rewards their team on a monthly/quarterly basis for achieving collections goals is the best way to motivate and promote a positive practice culture. By setting up clear metrics for success, a team can push towards goals on a daily basis and be rewarded frequently. This tends to work better than forcing team members to wait until the annual Christmas party to see what type of bonus might be in that envelope. If Clark Griswold has taught us anything, it is that waiting until Christmas Eve for the bonus check is never a good idea.
So if you have been rewarding the team financially for hitting goals all year, what type of gift should you give during the holidays? Your options fall into three different categories:
CASH BONUS. While you can certainly give this type of bonus out in cold hard dollar bills, we highly recommend adding this to a December payroll. Regardless of how a cash bonus is given, a monetary bonus is always considered taxable wages to your team member and must be processed through payroll. This is our least favorite (and least creative option for a holiday gift).
GIFT CARDS. If a gift card can be treated like cash and redeemable for general merchandise or has an equivalent cash value, it is treated like cash (above). In the past, gift cards under the de minimis fringe benefit limit have been considered non-taxable but that has recently changed.
GIFTS. A jacket with the office logo or the hot cocoa gift box from Knack are both considered tangible , non-cash gifts and are not taxable unless they exceed de minimis limits. While the IRS has never issued a dollar figure to define de minimis, it does define de minimis as “considering its value and the frequency with which it is provided, it is so small that it makes accounting for it unreasonable or impractical”. As such, it is always recommended that you consult with your advisor with your gift ideas. While the rules around gifts can be a little grey, we do prefer this method as the best way to show your team a little holiday cheer.