At the discretion of each department or school, gifts or awards may be made to regular, benefits-eligible university employees [50% full-time equivalent (FTE) or more] for non-performance related recognition, such as to acknowledge years of service or celebrate retirement, as per Administrative Guide Memo 2.2.10: Gifts and Awards for University Employees. Employee gifts should be occasional, non-recurring, and comply with any applicable taxability guidelines, and the funding source must be appropriate.
Gifts and gift cards to non-Stanford employees, such as students, vendors, and volunteers, are not covered under these guidelines and are subject to additional reporting requirements on the part of the recipient, and therefore are highly discouraged. For information on student gifts, see Financial Aid’s Student Stipend Policy.
Gifts to employees from external organizations (such as vendors) are subject to guidance outlined in the AGM 1.5.2: Staff Policy on Conflict of Commitment and Interest (COI) policy.
Related resources:
- See Topic Overview: Paying Human Subjects when gifts are provided as incentives for participating in research studies .
- See Topic Overview: Paying Honoraria when gratuitous payments as a gesture of goodwill and appreciation are made to individuals who are speakers or contributors in special Stanford events.
Per the updated employee gift policy as of July 20, 2023, for non-performance-related activities, (e.g., significant milestones or holidays) the non-taxable limit that departments may purchase an occasional gift for an employee is up to $100 per individual, per calendar year. This is an increase from the prior amount of $50. If the tangible gift exceeds the threshold of $100, the entire amount becomes taxable.
Employee Gifts
As described in IRS guidelines, taxability varies depending on the following considerations:
- Purpose: Gifts should be given for non-performance related purposes such as commemorating an event, offering condolences during bereavement, or as an award in recognition of a significant milestone. When determining taxability, aggregate value can be calculated separately, based on the purpose of each gift. For example, gifts for the purposes of bereavement and retirement can be considered separately from service milestone gifts.
- Frequency: Occasional and infrequent tangible gifts to employees, for purposes described above, are non-taxable up to certain criteria based on an aggregate value.
- Value: Each calendar year, the total value of employee tangible gifts must remain below non-taxable thresholds to avoid being subject to taxation. If the gift exceeds the threshold, the entire amount is treated as taxable. See Types of Employee Gifts and Tax Thresholds below for a breakdown of thresholds depending on the purpose of the gift.
Gifts or awards are treated separately than compensation for performance recognition services performed or extra earnings (e.g., overtime pay, retroactive pay, one-time or supplemental payments, Temporary Acting roles (TAR), etc.). When an employees assumes additional duties while another employee is on leave or a position is vacant, managers should consult their school or unit human resources manager to determine if the Bonus & Incentive program and/or Internal Staff Pay Changes are appropriate options.
Gift Cards
While gift cards can be provided as an employee gift, the full value of all gift cards, regardless of purpose or amount, is taxable. Before purchasing gift cards, consult the guidance on Categories of Purchases to identify the appropriate purchasing method and to learn about bulk purchases, gift card suppliers, and best practices for stewarding gift cards.
Stanford-branded merchandise or other tangible items, including food, are strongly encouraged as employee gifts instead of giving gift cards. This minimizes the tax burden for the recipient.
A tangible gift is a non-cash item of physical personal property such as a plaque, clothing, flowers, food, etc. Gift cards and gift certificates are not considered tangible gifts. Tax and shipping costs are excluded from the value thresholds.
Occasional gifts (e.g., holiday, morale, prizes, bereavement)
Occasional gifts are provided to employees to mark specific occasions. The table below describes examples of when they might be provided and taxability guidance.
| Purpose | Tax considerations |
|
|
|
|
|
|
Service milestone gifts
| Purpose | Tax considerations |
|
To acknowledge years of service to the university, service milestone gifts are:
For schools and units who participate in the program, service milestone gifts are provided through UHR’s Stanford Celebrates You program.
|
|
Retirement gifts and awards
| Purpose | Tax considerations |
|
|
|
|
Departments should:
- Ensure that gifts or awards conform to requirements of university policy and are appropriate for the funding source.
- Monitor the frequency and number of gifts and awards made to employees.
- Establish appropriate controls to ensure all pre-purchased gifts, gift certificates, and cards are kept in a secure place and record their distribution.
When a gift is provided to an employee, include the following details in the transaction to ensure appropriate tracking and tax reporting: The recipient’s name, employee ID, and occasion for the gift.
These details are captured in different fields, depending on the transaction type:
- Expense reimbursements: in the Expense Requests system (ERS), complete the Beneficiary section with recipient information. Beneficiaries are then selected from the drop down list in the Gift Recipients section of the transaction line details.
- Non-PO transactions: in (ERS), complete the Individuals (on whose behalf) section with recipient information.
- PCard purchases: in the PCard module, utilize the Business Purpose field to include the above details.
Once a reimbursement has been processed, the taxable transaction will be reported to payroll and associated FICA (OASDI and MED) taxes will be deducted from the employee’s next regular paycheck.
For detailed guidance on expense and expenditure types for gifts and gift cards, see the table below.
| Purpose of gift and method | Tangible gift purchased with PCard or paid with personal funds and reimbursed (ERS) | Tangible gift purchased directly from supplier (Non-PO or PO payment) | Gift cards purchased from supplier (see purchasing guidance) |
| Occasional gift | Use expense type Gifts or Gifts - Foreign Activity Use expenditure type:
| For Non-PO Payment, use category Special Request and expense type “Special Request”. For PO payment, submit a purchase requisition. Use expenditure type:
| Use expense type Gift Cards - Employee or Gift Cards - Employee (Foreign) Use expenditure type 52210 Employee Gifts Taxable for gift cards of any amount. |
| Bereavement | |||
| Service Milestone | Use expense type Gifts or Gifts - Foreign Activity Use expenditure type 52240 Employee Morale for a tangible gift that is up to $400. Use 52210 Employee Gifts Taxable for any tangible gift provided in addition to a Stanford Celebrates You program gift. | For Non-PO Payment, use category Special Request and expense type “Special Request”. For PO payment, submit a purchase requisition. Use expenditure type:
| |
| Retirement |
- Visit Topic Overview: Business and Travel Expenses to review the policies and resources associated with business expenses.
- See Topic Overview: Categories of Purchases to learn more about purchasing goods and services for Stanford.
- Review Commonly Used Expenditure Types to ensure that expenses are recorded properly.
- Go to Cardinal at Work to learn more about gifts in recognition of employee performance.
- Visit the following university policies for guidance on employee gifts:
