Purpose: Have you ever given an employee a gift card or some sort of fringe benefit and need to figure out how to add it to the employee's payroll record? This help guide will walk you through how to do just that. 

The example below is based on the following scenario:

For tax purposes, the employer wants to document a $200.00 gift card given to the employee and cover the taxes (Employee portion of FICA). The employee is single and lives in the state of Utah.

To add a fringe benefit to an employee's payroll record (gift card, meal voucher, etc.), start by creating an off-cycle payroll. Navigate to the Payroll tab in BambooHR, and click the Off-Cycle Payroll button. From here, fill out the fields on the settings page, including Payroll Name, Pay Date, Pay Period, and select which employee(s) this benefit applies to. As long as the employees you need to pay are enrolled in a pay schedule for the period you select, you can select any period. It will default to a one-day period, which will work in most if not all, cases. Make sure the pay date is at least two days from the current date. Then, click Start Payroll.

On the Off-Cycle Payroll Options page, select Choose Custom Settings. If applicable, choose to suppress employee wages, recurring extra pay, and deductions. To suppress all deductions, select I want to edit deductions and then uncheck the box for the entire table. 

Then, zero out tax withholdings. Navigate to the Taxes section and select I want to customize taxes. Choose the option that allows you to enter a custom amount for federal and state withholdings and enter $0.00. If you are paying federal and state taxes, you can add the amount of taxes owed into the custom fields. You will need to calculate these independently. 

Once on the Edit page, add the fringe benefit as extra pay by choosing the Non Payable Taxable Income pay type and entering the amount. 

In this example, we gave this employee a $200.00 gift card. You can see we have added that to their record under the Non Payable Taxable Income pay type. 

Next, you will want to calculate the gross-up amount for the taxes you wish to cover with this benefit. We recommend using Business.org's Gross Up Calculator to find the additional tax amounts. 

In this example, this employee is taxed in the state of Utah and will need a gross-up amount of $216.57 to cover FICA taxes. Please note that although FICA and Medicare are separate on the calculator, we are including both amounts as the FICA total.  

Once you have found the gross-up tax amount, find the difference between the gross-up amount and the fringe benefit amount. Then, add the difference as extra pay using the Additional Regular Pay type. 

In this example, $216.57 - $200.00 = $16.57. We have added $16.57 as additional regular pay to the employee record. 

Lastly, click Calculate Off-Cycle Payroll. Then, scroll down to the Payroll Details section and click the Paystubs tab. Locate the employee, and verify that their net pay equals $0.00. Once you verify this, you can click Approve Off-Cycle Payroll to process the benefit.

In this example, you can see Charlotte has a net pay of $0.00 and the addition of the fringe benefit.