Should you buy gift cards for employees?

Yes—gift cards can be a good employee perk when you want something simple, flexible, and likely to be appreciated. They’re especially useful for recognition, thank-yous, spot rewards, and remote or hybrid teams where physical gifts are harder to distribute.

A few important cautions:

• In the U.S., gift cards are generally treated as cash equivalents, so they’re taxable to the employee even if the amount is small.
• They typically need to be included on the employee’s W-2 and are subject to the usual payroll taxes and withholding.
• Tax and payroll handling can vary by country, state, and company policy.

If you want to use them regularly, check with your payroll provider or CPA first. Some employers also choose to gross up the award to cover the employee’s tax cost.

Best practice: use them for occasional recognition, keep records of who received what, and consider a platform that lets employees choose a card they actually want.

So: yes, buy them if your goal is flexible employee recognition—but confirm the tax handling first.