Gifts to Employees

In general, the University will not approve gifts given to employees using University funds, unless they are for:

  • Business Performance
  • Years of Service
  • “De minimus” gifts (e.g., gifts with small monetary value)

For information about Gifts to Non-Employees, click here.

 

Departments and recipients should bear in mind that even when a gift given to an employee is allowed under University policy, it may be considered taxable income, and be reported on the employee’s annual Form W-2.  Should a department decide to approve expenses of this nature, departments may consider:

  • Fair and consistent application among employees
  • Budgetary constraints
  • “Front- page test” – will it seem appropriate to others (i.e., donors, taxpayers) that the University, a non-profit organization, pay for this event?

Additional compensation should be considered where appropriate.

 

Business Performance

Gifts, prizes or awards given to employees as recognition for exemplary business performance are an appropriate business expense.  Cash or a cash equivalent (i.e., a gift certificate) may be given, but is always considered taxable by the IRS, and reported on an employee’s annual Form W-2.   Non-cash gifts of $100 or less are reimbursable and non-taxable. Non-cash gifts with a fair market value above the “de minimus” benefit threshold of $100 are considered taxable by the IRS, and reported on an employee’s annual Form W-2.

Although it should be rare, a business performance gift to an employee with a value greater than $100 requires Supplemental Approval.  Gifts exceeding this threshold (by more than 50%) or any requests not listed as eligible for Supplemental Approval, still require a formal written exception request approved by a Senior Departmental Officer for documentation and evaluation of approval by Accounts Payable

 

Years of Service

Gifts, prizes or awards related to length of service and retirement are considered appropriate business expenses and will be reimbursed by the University. Cash or a cash equivalent (i.e. a gift certificate) may be given, but is always considered taxable by the IRS, and reported on an employee’s annual form W-2.   In order to be non-taxable to the employee, the gift must be non-cash and meet the following criteria:

  • Must be awarded as part of a meaningful presentation (ceremony or celebration).
  • Cannot be given before the 5th year of service, and with at least 5 years in between each years of service award.
  • Have a fair market value of $400 or less for the calendar year. 

Departments may decide to give gifts that recognize years of service that do not meet these criteria.  However, unless considered “de minimus”, the gift will be reported as income and the amount will be subject to taxation.

Although it should be rare, a years of service gift to an employee with a value greater than $400 requires Supplemental Approval.  Gifts exceeding this threshold (by more than 50%) or any requests not listed as eligible for Supplemental Approval, still require a formal written exception request approved by a Senior Departmental Officer for documentation and evaluation of approval by Accounts Payable. 

 

“De minimus” Small Gifts (including flowers or fruit baskets)

The University suggests that employees first consider funding these with their own contributions.  However, departments may at their discretion choose to provide a small gift to an employee or another department to recognize a significant occasion.  Common examples of small gifts include flowers or fruit baskets. The University may reimburse employees for the costs of these purchases.  Non-cash gifts given to an employee with a fair market value of $100 or less for a calendar year are considered non-taxable.  As a reminder, this threshold of $100 does not include any cash or cash equivalent (gift certificates) given as a gift to an employee, which are always considered taxable by the IRS.

The University will approve small gifts given in recognition of the following business events:

  • Collective recognition of performance
  • University-related business occasions or events as described in the Employee Entertainment section

For gifts that recognize personal occasions, the University suggests that employees first consider funding these with their own contributions.  If a department chooses to seek reimbursement, the University will approve reimbursement of small gifts given in recognition of the following life events:

  • Birth or adoption of a child
  • Funeral, illness or hospitalization
  • Congratulations on a business related achievement

Please note that in the event a contribution is requested in lieu of flowers, only a Dean, VP, Associate Dean or Senior Financial Officer can approve.  A copy of the 501C3 exemption should be requested.

The University will not approve reimbursement for gifts given for the following personal occasions:

  • Engagements, weddings, anniversaries
  • Holidays
  • Individual Birthdays
  • Congratulations on other personal achievements

Although it should be rare, a "de minimus" gift to an employee with a value greater than $100 requires Supplemental Approval.  Gifts exceeding this threshold (by more than 50%) or any requests not listed as eligible for Supplemental Approval, still require a formal written exception request approved by a Senior Departmental Officer for documentation and evaluation of approval by Accounts Payable. 


Documentation Required

The original receipts/invoices for gifts must include:

  • Date
  • Items purchased
  • Total amount of the purchase
  • Proof of payment
  • Employee’s name, home address and Social Security number for reporting to Payroll (for gifts with value in excess of $100 or that do not meet the IRS exemption for years of service gifts).

The approved purpose of the gift must be clearly documented.