Employee Gifts and Awards

Accounts that are not funded by mandatory student fees, contracts or grants, Available University Fund, state appropriations or restricted by donors may pay for an employee gift. Gifts must comply with Standard Administrative Procedure 31.01.99.M0.01: Taxation of Special Payments and Awards to Employees. Payment Request or Payment Card documentation at a minimum must include the employee's name, UIN, and purpose/reason for the gift. All employee gifts/awards are coded 5240.

Is an employee gift/achievement award taxable income to an employee?

• If infrequent and less than $100 per year, it would not be considered taxable income.
• An exception to this is gift cards. Gift cards or cash equivalent in any dollar amount are tax-reportable income to the employee and would require a Workday One-Time Payment Request to be submitted.
• State accounts may only pay for what is considered an achievement award and are limited to $100 in a given year.
• Customary items (ex. Flowers, plants, cards, baskets, etc.) purchased for funerals or illnesses in any dollar amount are not considered taxable income to the employee

Retirement Gifts/Length of Service Awards

• Length of Service Awards - These awards must be part of a meaningful presentation and given to an employee no more than once every five (5) years. Non-cash awards of $400 or less are not taxable.
• Retirement Awards - May be excluded from income if the dollar amount of the non-cash award relates to the retiree's length of service. Documentation is to be provided describing the relationship between the retiree's length of service and the value of the award.
• Safety Awards - Non-cash awards (up to $400) given to employees directly involved are not taxable. Any safety awards given to managers, administrators, other professional employees or clerical staff not directly involved with the safety performance will be fully taxable.
• Gift cards or cash equivalent in any dollar amount for the above awards are tax-reportable income to the employee and would require a Workday One-Time Payment Request to be submitted.

Cash Awards

• Cash awards must be processed by departments in Workday using the Workday One-Time Payment Request
• Select the One-Time payment plan option: Cash Award or Cash Award – Gross up (if the department is paying the award taxes on behalf of the employee).
• The Cash Award payment will be processed based on the recipient’s payment election payment type (direct deposit or check) in Workday. The Award will be paid on the recipient’s next regularly scheduled payday. All appropriate taxes will be withheld from the payment.
• The department’s account will be charged for the employer’s share of Social Security and Medicare tax. If grossed-up, the department’s account will be charged for both the employee and employer’s share of Social Security and Medicare tax and the employee’s Federal Withholding deduction.