Years Of Service Award Taxable. This limit does not apply to awards made as part of a qualified retirement plan. There are limits on service awards (not during the first five years, and not more often than every five years) and safety awards (not to more than 10% of employees).
Employees who receive an initial long service award at, for example, 20years , mustwait for a further 10 years, in other word until they haves worked for the same employer for 30 years, before the reduction of the value of the asset may be applied again. On the payroll it should be reflected as a periodic earning with an irp5 code 3605, whether this is long service award or not. The safety achievement award is given to a manager, administrator, clerical employee, or other professional employee.
For example, if the 15 year award was given at 17 years of service, and then the next award is given at 20 years of service, the 20 year award will be a taxable benefit, since five years will not have passed since the previous award.
And b) doesn’t favor employees who make more than $115,000 in income for the preceding year.). R250 for those who have completed 5 years of service; A) is given as part of an established, written awards program; Businesses can deduct up to $400 for all awards of tangible personal property given to any one employee annually.