Although we can't give any tax advice, we can offer a few examples of how some companies that use Matter have approached the question. These are just examples — your finance department will need to determine the specific course of action.
Gift Cards
Some of our customers treat gift cards as taxable income. Others do not. Still, others treat gift cards as non-taxable as long as the total amount earned is below a certain amount per year (e.g., not taxable as long as total gift cards earned are less than, say, $1,000/year).
Premium Gifts
Premium Gifts are physical items redeemed using coins. Similar to gift cards, tax treatment can vary depending on company policy and local regulations.
Some companies treat Premium Gifts as taxable income based on the fair market value of the item. Others may apply thresholds or treat them similarly to non-cash employee perks.
Since employees receive a physical item (rather than cash or cash equivalents), the tax treatment may differ from other reward types. Your finance team will need to determine the appropriate approach.
Charitable Donations
Users receive a receipt via email for every donation they make through Matter. Your finance department is going to need to determine how to approach this, but we’ve seen a few companies take the following position on Matter donations:
The donation is made by the company on behalf of its employee. Since the employee never receives any cash benefit, there is no tax deduction or liability for the employee. Under this view, the company (not the employee) may be eligible for a tax deduction for the donation.
These are just a few approaches that we have observed. Your finance department will have to determine if this is the best option or if another approach is necessary. We can provide a report to your finance team upon request. View sample report here.
Matter is not responsible for determining the tax implications of using our Rewards feature with your team.