A bonus worthy of Scrooge

Automotive workers in Michigan given $15 gift certificates by employer — employer then deducts $5.51 from paycheques to pay federal and state tax on the bonus
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|hrreporter.com|Last Updated: 01/16/2004

W

orkers at an automotive plant in Traverse City, Mich., got what they thought was a nice, albeit small, pat-on-the-back for a job well done when management handed out $15 (U.S.) grocery and retail gift certificates before Thanksgiving.

However, Tower Automotive has since decided the cards are “same as cash” gifts subject to federal and state income taxes totaling 36.75 per cent. That means workers will be faced with a deduction of $5.51 on their next paycheques to pay for the bonus.