Have you talked to your payroll dept.? I'd be amazed if they were on board with doing anything other than paying the employee normally. There are all kinds of employment tax considerations, I imagine.
Bill WongManager of Giving OperationsSavannah College of Art and Design ®
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I just re-read and maybe you are talking about an outside employee? Not one of your own....? In that case, his payroll isn't likely to agree to anything but paying him normally.
Hmmm. I would think that the key distinction is whether the money that you receive belongs to the employee. If the organization includes the money in the employee's income (if the money is recorded on the Form W-2 provided to the employee, for instance, or at least if the money is recorded in the payroll system so that it will be included on the employee's W-2), that would make clear that it's the employee's money. Then it wouldn't matter how the money makes its way to a gift account.
After all, if my employer pays me and then, at my request, makes a payroll deduction to support a charitable organization, that's still my money, even though I didn't deposit the money and write a check myself.
This will largely be governed by what your payroll office is set up to handle. It's also worth noting that the employees would still be responsible for all payroll and income taxes on this income, in the usual way (although the employee may get an offsetting income tax deduction, if their circumstances allow them to itemize deductions).
I have sometimes seen an arrangement where an employee and their charitable employer agree that, rather than pay the employee a bonus or pay a contractor to teach a course or whatever, the employer will contribute an equivalent amount to one gift account or another. In that case, it's not/never the employee's money, so it's not the employee's gift (although you might recognize them for their generosity, and, on the plus side, the employee doesn't have any tax liability, since, again, it's never their money). Whether that's an option would depend on what policies your organization has around employment and what processes you payroll office is set up to handle.
My US$0.02 worth; the usual disclaimers apply.
Alan S. Hejnal
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