When you send rewards through Guusto, some of them may count as taxable benefits for your employees. To help you stay compliant and simplify reporting, Guusto makes it easy to track, export, and manage these benefits directly from your Workspace. This article walks you through how the reporting works, what employees will see, and best practices to keep in mind.

1. Log into your Guusto Admin account.

2. Navigate to Workspaces → Manage Gifting.

3. Select the Taxable Benefits tab.

4. Apply filters such as date range or location as needed.

5. Click Export to download a CSV file that’s compatible with most payroll systems.
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The report can be uploaded into most payroll systems, which will automatically process the information and reduce manual work for your finance team. If you run into any issues, we recommend contacting your payroll provider directly for guidance specific to their system.

❓ What will my employees see?
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Once you process the taxable benefit report in your payroll system, the employee’s pay stub, as well as their year-end tax form, will reflect the benefits received.

❓What is grossing up?

Because employees pay taxes on gifts they receive, some companies choose to “gross up” the benefit. Grossing up means adding extra to the gift amount to cover the taxes. For example, if an employee in a 30% tax bracket receives a $100 gift card, $30 would later be deducted from their paycheck for taxes. To offset this, you could gross up the gift by giving them a $130 gift card, with $30 intended to cover the tax. Whether or not to gross up employee benefits is a business decision—there’s no right or wrong approach.

❓Are taxable rewards right for you?
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We know nobody likes paying taxes. However, employees almost always appreciate receiving a gift that is relevant to them, even if it is taxable. And a taxable gift card, that the employee can spend where they like, is preferable to a set gift card that would be taxed but not necessarily used by the employee.

You may also consider a points-based reward system thinking points can’t be taxed. This is true, the points employees earn won’t be taxed. But as soon as the points are redeemed for a reward the value of the item is taxed the same way a gift card would be. A points system is actually more difficult when it comes to taxes due to a lack of transparency around the value of the reward, which can lead to confusion for your accounting team and your employees. By choosing a gift card-based reward system, the value of the gift is easily understood by everyone.

Click below to download this information in PDF format: