As the holidays approach, you may be thinking of offering your employees a bonus or even presenting them with a gift. However, whether it be a bonus, gift, or voucher, you may have certain reporting and payment obligations.

In this article, you will find helpful information and guidance about processing employees' cash bonuses or gift vouchers as well as any tax implications.

What constitutes a trivial benefit?

If you provide a gift that meets all of the following criteria, then it's a trivial benefit:

It costs less than £50 to provide.
It's not cash or a voucher that can be exchanged for cash
It's not a contractual obligation
It's not a reward for performance

If the gift is a trivial benefit, then there's no reporting requirement and therefore no tax or national insurance implication.

Cash bonuses

Any cash bonuses you give to your employees are taxable income and must be included in your employees' gross income. This is so that the tax and national insurance can be calculated accordingly.

Adding cash bonuses per employee

From the employee's record, click the Pay items tab.
Under the Additional payments section, click Add a new payment.
Select the Payment type as Bonus, and choose a Type of bonus.
Enter a bonus Name, select a Date in the month and add the Fixed amount.
If necessary, choose how often you'd like to pay this bonus, and whether or not the payment should be included in the pension calculation.
Click Save.

Adding Cash Bonuses in Bulk

From the left, choose Pay items, then Additional payments.
Choose Bonus and commissions from the drop down
Click Import payments to download a template where you will be able to add multiple bonuses.

For further information about bulk uploads, please refer to our Help Centre article.

Note: Cash bonuses are included in the bonus calculations for gender pay gap reporting.

Gift vouchers

If you give your employees gift cards or vouchers worth more than £50, then you can add this as a benefit on PayFit to ensure that the benefit is treated correctly for tax and national insurance purposes.

Adding gift vouchers per employee

From the left choose Benefits in kind, then Vouchers & credit cards.
Search for the employee in the search box or scroll down the employee list.
Next to the relevant employee, click See all, then Add a new voucher or credit card.
Complete the fields with the details that best describe the vouchers.
Click Save voucher.

Adding gift vouchers in bulk

From the left, choose Benefits in kind, then Vouchers & credit cards.
Click Import standard vouchers to download a template where you can add multiple gift vouchers at once.

For further information about bulk uploads, please refer to our Help Centre article.

Goods

If you present your employees with gifts in the form of goods, then it's also considered a benefit and, therefore, has certain reporting requirements. Goods cover anything that is not cash, such as a physical gift.

Adding goods per employee

From the left, choose Benefits in kind, then Assets transferred and loans.
From the drop-down, choose Assets transferred.
Search for the employee in the search box or scroll down the employee list.
Next to the relevant employee, click See all, then Add a new asset transferred.
Select the Type as Other and the Circumstance as New asset is bought by company and given to employee.
The Value of asset should be the higher of the amount paid by the company, or the cash resale value.
Complete the rest of the fields as necessary, then click Save details.

Adding goods in bulk

From the left, choose Benefits in kind, then Assets transferred and loans.
From the drop-down, choose Assets transferred.
Click Import assets transferred to download a template where you can add multiple employee gift vouchers at once.

For further information about bulk uploads, please refer to our Help Centre article.