The end of 2021 is fast approaching. As a business owner, have you considered how you plan to finish the year strong while you also set yourself up for successful retention of your quality employees?
What’s the Best Form Of Holiday Cheer For Your Employees?
Let’s review the necessary planning involved if you’d like to shower additional holiday cheer on your employees through:
- Holiday Gifts
- Bonuses & Commissions
Step 1: Consider where your funds will come from and if you want this to be a one-time economic commitment or an ongoing festive tradition. Do you want funds to be administered via payroll, separate check, direct deposit, company shares, etc.?
Step 2: Decide which type of benefit you would like to provide to your employees and gain quality counsel from the appropriate accounting and tax support to ensure you have all of your bases covered on both legal & logistical fronts.
Schedule a complimentary call with MLP Accounting & Consulting in Springfield, MO, today!
Should You Consider Profit-Sharing?
In this challenging season for employee retention, profit-sharing could be an ideal option for your company. Although 401(k) plans and profit-sharing plans are similar retirement benefits, it’s critical to note that 401(k) plans are typically funded via the employee’s wages with a percentage contributed by the employer, and profit-sharing plans are funded entirely by the employer. Larger corporations with publicly traded stock often share a percentage of stock with their employees based on that year’s profits. This is a fantastic way to help your employees tangibly feel directly vested in your company’s profitability, forward momentum, and success.
At MLP Accounting & Consulting, our Profit First program can help ensure you have the appropriate funds available when you decide to ring in this holiday cheer for your employees. Schedule a complimentary call to discuss how Profit First can help strategize your plan for success!
Would Holiday Gifts Be A Better Option?
What are the holidays without gifts?! Who will decide what your gift will be? Do you want to support local businesses or perhaps one of your clients?
However, be aware that there are a few new federal tax considerations before you splurge on a trip for the entire office or gift an all-expense-paid vacation to your team. Read more specifics regarding holiday gift tax laws from FindLaw Attorney Writers.
Are Bonuses Or Commissions A Better Choice For Your Team?
It’s essential to decide if you plan to raise the percentage of commission, give a salary raise, or if you plan to give a tax-free bonus.
Pro-tip 1: If you decide to give a bonus that isn’t tax-free, be sure you carefully craft your announcement to your staff to avoid decreasing overall office morale.
Pro-tip 2: What if your company was blessed with a profitable year, but you are hesitant to set a precedent with your employees that you can’t guarantee you can maintain year after year? [Add Suggestions Here]
Pro-tip 3: Ensure you carefully consider how you plan to structure the distribution of bonuses you give. Will each of your employees receive the same bonus amount? Or will they be tiered or performance-based bonuses? It’s okay to include a clause within your announcement that notes that the percentage or amount for future years may adjust.
Remember, the key is to raise morale, shower holiday cheer, and create a culture of success within your organization, to end 2021 strong. Our Profit First strategies are vital tools for any business owner to explore here in Springfield, MO. Book your complimentary call now.