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Handling Gift Cards given to your employees
Gift cards are considered taxable according to the IRS.
When the gift cards are purchased by the employer, the program paying for the gift cards is charged in the voucher.
To record the gift card for each employee, follow the steps below:
When the gift cards are purchased by the employer, the program paying for the gift cards is charged in the voucher.
To record the gift card for each employee, follow the steps below:
- A payroll adjustment for each employee will need to be entered. If the employer will pay the employee’s portion of the Social Security & Medicare tax, the payroll adjustment will be marked as a PADJ and have the gross amount and the tax amounts. This will add the information to each employee’s YTD and not withhold tax from their payroll.
- If the employee is to pay their portion of SS/Med, 2 payroll adjustments will be entered. The first will be a PADJ and contain the gross amount. The 2nd will be a CADJ with a positive amount to the Social Security and Medicare fields. When these adjustments are run with a payroll, the gross will be added to the employee’s YTD and the taxes will be withheld along with the taxes calculated from the timesheet information.
