Gift and Taxes

[Anonymous]

If I give my nanny a cash (or check) monetary gift for her birthday do I need to claim it on my payroll? I don't think so, but just checking.

[Anonymous]

Legally, yes, but I never did. I paid everything else 100% on the books, but her Christmas and birthday bonuses I just gave her in cash. I am comfortable with that level of "cheating."

Legally, the only gifts you can give that are not supposed to be taxed have to be small incentives, like a $5 gift card or something.

[Anonymous]

I never have. We give her cash.

[Anonymous]

There is some low level exemption ($75?) from IRS — you technically cannot give an employee a “gift” more than that without paying taxes. However I think almost everyone bends or ignores this rule.

I will do bonuses on payroll since they are generally $500+, but not birthday/Xmas gifts as those are much more modest..

[Anonymous]

Anonymous wrote:Legally, yes, but I never did. I paid everything else 100% on the books, but her Christmas and birthday bonuses I just gave her in cash. I am comfortable with that level of "cheating."

Legally, the only gifts you can give that are not supposed to be taxed have to be small incentives, like a $5 gift card or something.

This for us also.

[Anonymous]

it is standard to give christmas bonuses as cash. nanny bonuses aren't in the same league as corporate bonuses, with people making tens of thousands of dollars. sure, you can give it to her through payroll, but it will make you seem very out of touch.

[Anonymous]

Anonymous wrote:it is standard to give christmas bonuses as cash. nanny bonuses aren't in the same league as corporate bonuses, with people making tens of thousands of dollars. sure, you can give it to her through payroll, but it will make you seem very out of touch.

Out of touch? That doesn’t even make sense.

Legally, it needs to be done through payroll. My current employer gives cash bonuses, which saves us both money and I appreciate. My former employer put all bonuses through payroll, which is perfectly acceptable (as it is the law).

[Anonymous]

We did anything under $100 in cash and anything over through payroll. Holiday and end-of-employment bonuses were typically a week's pay, so well over $100. Birthday was usually under and thus not reported.

May also depend on whether your cashflow is such that you could withdraw enough cash to do a larger bonus without it seeing out of place. We could not have, so that would have been an audit risk.