We are anticipating a gift to employees of a $25 gift card, which can be used for any type of purchase. We also have some supervisors who reward employees with gift cards of small denominations. Are these gifts taxable, since they represent cash, and, if so, is there a minimum which would not be taxable?

Even $.01 is taxable as wages.

Would it not matter if the gift is from the employing organization or from an employee within that organization.

Every Christmas one of the senior managers personally spends her own money and gets employees a gift certificate. I don't see those as being wages or taxable.

"Every Christmas one of the senior managers personally spends her own money and gets employees a gift certificate. I don't see those as being wages or taxable."

Neither do I.

Well, from the poster's original post, I found it unclear whether or not the manager was buying the gift cards out of his or her own pocket.

So not to be difficult, but what if you senior manager then turns around and expenses the said "out of pocket gifts"?

Technically, shouldn't they then also be included into the total compensation total to be reported?

And this is why my co-workers say I suck the fun out of everything! I won't let them raffle off anything either...

I guess they'll pass out the gifts one day when I'm not there

Just gross up the amount of the card and run it through their payroll (figure out the taxes on the amount, run that through, along with a deduction for the amount paid in cash). The employee gets the whole "bonus", and you don't get in trouble with the Wage and Labor laws.