Do gift cards count as taxable income?

Q. We plan to give gasoline gift cards to employees as incentives for picking up additional shifts. Are these cards taxable? Can we, the employer, simply pay the employees’ portion of the taxes?

The gift cards are taxable compensation to the employees. If the employer pays the employees’ portion of the taxes, that payment also represents income to the employees and is taxable to the employees.

You could consider increasing the amount of the gift cards to cover the taxes that the employees will have to pay.