If you have a rewards and recognition program at your organization, does the employee pay taxes on the gifts or the employer?  If so, how is it handled? We are in the implementation phase for roll out of a new employee recognition program that allows employees to receive rewards for demonstrating values and behaviors aligned with our company's values.

Hi, in my previous company we had a recognition tool (with Achievers). People could give everybody a social recognition and if you were a cost center owner you could give financial recognition through a point system and employees would save points and could then buy something via Amazon for instance. The challenge with the latter was the payroll implication, in many countries this kind of financial recognition is seen as a benefit in kind so it has to be processed via payroll, put on the payslip and annual statements. It was definitely a great tool but the payroll implications for that team were underestimated so make sure that that part is covered in the back sooner than later. The tool was well received and used 24/7 but the admin part behind it was tough.... 

Wonderful idea! We've recently revamped our Reward & Recognition policy and introduced a Trust-based reward system that eliminates the need for approvals. Now, anyone can acknowledge and appreciate their peers, mentors, team members, or bosses without the hassle of going through a cumbersome approval process. The new form allows you to associate each reward with a specific value that reflects our organizational principles, enabling employees to showcase these values through their actions. Every month, we compile these reward stories into Value stories, showcasing the positive impact of our values in action.

In addition to these regular rewards, we also have quarterly and yearly awards that recognize achievements of greater significance. The best part is that these Rewards are non-taxable for employees, as they come in the form of gift vouchers or redeemable points. However, the employer is responsible for handling the tax implications.