Please work directly with your organization's payroll team and/or tax attorney to determine the best tax management strategy. Taxation may vary per organization and the type of reward (sales incentives vs. an anniversary gift).
Almost all of our clients gross up taxes for rewards! Meaning that you as an employer take responsibility for taxes and cover these costs on behalf of your employees.
You can access the taxable reward value in your Admin Tools (run.blueboard.com). You can export this as a CSV report and provide to your payroll team at any time. What we see clients do most frequently is pull a report EOY of all rewards sent with reward values, then send this to their payroll team to handle grossing up taxes at the end of each year.
If your organization chooses to defer the tax responsibility and pass along taxes to the employee, we ask that you are as transparent as possible about this process and include it in the reward received email. Passing along the tax burden can lead to employee confusion when they feel they are charged for a "reward" that was gifted to them. Deferring the tax burden to the employee can impact the success of your rewards program, so we rarely see clients passing along taxes to their employees.
Reminder that legally we cannot provide tax advice, so please always consult with your payroll team and/or tax attorney!
Need more assistance with this topic? Reach out to firstname.lastname@example.org.