Spanx employees given $10k, and 2-first class plane tickets.

[Mai72]

Now, this is how you treat your employees. Spanx just signed a $1.2B deal with Blackstone. Has anyone seen the documentary on Sarah Blakely?

Its amazing how she started her business in the late 90s from nothing to its current form.

Spanx employees given $10,000 and two first-class plane tickets

The chief executive and founder of shapewear company Spanx has surprised employees with two first-class plane tickets and $10,000 each to celebrate the company's $1.2 billion deal with Blackstone.

www.cnn.com

 

[dasherHampton]

Spanx has 750 employees, so 7.5 million?

So a pat on the back is appropriate?

 

[allisolm]

Spanx has 750 employees, so 7.5 million?

So a pat on the back is appropriate?

7.5 million cash plus 1500 1st class airline tickets to anywhere in the world. So, yes, I think a pat on the back is in order since I don't know of any other company that has done nearly as much for every one of their employees. She didn't have to do anything.

 

[pete6032]

Spanx has 750 employees, so 7.5 million?

So a pat on the back is appropriate?

Yes. Employers who celebrate their employees should be recognized with the occasional news article.

 

[dasherHampton]

If I scored a billion dollar deal in this employment climate my 750 employees would be getting at least 50k. Maybe 100k.

 

[dullard]

7.5 million cash plus 1500 1st class airline tickets to anywhere in the world. So, yes, I think a pat on the back is in order since I don't know of any other company that has done nearly as much for every one of their employees. She didn't have to do anything.

I think the point that dasherHampton was trying to make was that this will end up being at most 1% of the money made in the deal (and that assumes most tickets are used and are used for expensive overseas trips). It is a nice gesture to employees, but it really isn't much money for them to give away. I've been in on a similar type of deal and walked away with a year's salary as a bonus, not just $10k and tickets.

The employees that made the company a success get ~1%. What percent of the deal did the deal brokers make? The lawyers for the deal? Is a 1% tip at a restaurant enough to make you feel that you deserve a pat on the back, because you don't have to leave any tip?

 

[LikeLinus]

7.5 million cash plus 1500 1st class airline tickets to anywhere in the world. So, yes, I think a pat on the back is in order since I don't know of any other company that has done nearly as much for every one of their employees. She didn't have to do anything.

Wonder how much she gave to the people who manufacture her product in Asia and the Middle East? I bet those poor workers got nothing for doing the actual hard labor work.

But pat on the back for giving back to the fortunate ones that work for a billion dollar company who are paid a good wage.

 

[ponyo]

What about the tax bill? Who's paying that? The company or the employees? The IRS and the state treasury will want their cut of the $10k cash and 2 first class tickets. If first class tickets are worth $10k each, that's $30k income that will be taxed by the IRS and the state.

 

[soulcougher73]

What about the tax bill? Who's paying that? The company or the employees? The IRS and the state treasury will want their cut of the $10k cash and 2 first class tickets. If first class tickets are worth $10k each, that's $30k income that will be taxed by the IRS and the state.

I'd gladly pay the tax bill for that if i were an employee. It's not like they will be worse off somehow.

 

[pcgeek11]

Wonder how much she gave to the people who manufacture her product in Asia and the Middle East? I bet those poor workers got nothing for doing the actual hard labor work.

But pat on the back for giving back to the fortunate ones that work for a billion dollar company who are paid a good wage.

Everything is a negative...

An employer does something good yet it deserves to be shit on...

What about the tax bill? Who's paying that? The company or the employees? The IRS and the state treasury will want their cut of the $10k cash and 2 first class tickets. If first class tickets are worth $10k each, that's $30k income that will be taxed by the IRS and the state.

With proper planning they can still enjoy their gifts and pay the taxes with no impact to their personal finances.

 

[ponyo]

I'd gladly pay the tax bill for that if i were an employee. It's not like they will be worse off somehow.

They won't be worse off but the tax bill to the Fed and the state will be around $10k. So that $10k cash they get? Government takes it. So that leaves them with 2 first class tickets. Great. They can enjoy the first class flight but then will have to pay for hotel, food, and spending from their own pocket since they had to use the $10k cash they got to pay taxes.

Everything is a negative...

An employer does something good yet it deserves to be shit on...






With proper planning they can still enjoy their gifts and pay the taxes with no impact to their personal finances.

Yes, I'm sure all the employees have their finances in order. lol.

 

[LikeLinus]

Everything is a negative...

An employer does something good yet it deserves to be shit on...

"Spanx founder Sara Blakely surprised employees with the news, she revealed in a post on her verified Instagram account Friday.

In the video, Blakely spun a globe, before revealing that she had bought each of her employees two first-class plane tickets to anywhere in the world."

Yeah, this was all for the employees... When companies I've worked for give extra payouts and such based on the performance of the company, they generally just do it and don't run to instagram and make videos talking about the great things they are doing "for the employees". They just do it and that is that.

 

[Johnny Ringo]

They won't be worse off but the tax bill to the Fed and the state will be around $10k. So that $10k cash they get? Government takes it. So that leaves them with 2 first class tickets. Great. They can enjoy the first class flight but then will have to pay for hotel, food, and spending from their own pocket since they had to use the $10k cash they got to pay taxes.


Yes, I'm sure all the employees have their finances in order. lol.

And the employer can also potentially write these "gifts" off as a business expense for tax purposes as they can treat these as a "bonus".

At the end of the day if the employee ends up with more money than you started with at the beginning of the day it is a net win...but most employers don't do things as an act of kindness. There is always more at play.

Awards and bonuses require special treatment

Compensation in the form of awards and bonuses require special tax treatment.

Bonuses. You can deduct the cost of any bonuses you pay to your employees, as long as the bonus represents pay for services rather than a gift, and it's reasonable in view of the employee's services and performance. If you're a cash method taxpayer, you must have paid the bonus before the end of your tax year in order to deduct in that year.

 

[pcgeek11]

"Spanx founder Sara Blakely surprised employees with the news, she revealed in a post on her verified Instagram account Friday.

In the video, Blakely spun a globe, before revealing that she had bought each of her employees two first-class plane tickets to anywhere in the world."

Yeah, this was all for the employees... When companies I've worked for give extra payouts and such based on the performance of the company, they generally just do it and don't run to instagram and make videos talking about the great things they are doing "for the employees". They just do it and that is that.

Why that bitch! What a horrible person.
/sarcasm

And the employer can also potentially write these "gifts" off as a business expense for tax purposes as they can treat these as a "bonus".

At the end of the day if the employee ends up with more money than you started with at the beginning of the day it is a net win...but most employers don't do things as an act of kindness. There is always more at play.

Awards and bonuses require special treatment

Compensation in the form of awards and bonuses require special tax treatment.

Bonuses. You can deduct the cost of any bonuses you pay to your employees, as long as the bonus represents pay for services rather than a gift, and it's reasonable in view of the employee's services and performance. If you're a cash method taxpayer, you must have paid the bonus before the end of your tax year in order to deduct in that year.

Damn it must suck going through life with this kind of thought process. Always thinking the worst...

 

[feralkid]

What about the tax bill? Who's paying that? The company or the employees? The IRS and the state treasury will want their cut of the $10k cash and 2 first class tickets. If first class tickets are worth $10k each, that's $30k income that will be taxed by the IRS and the state.

Who does your taxes?

 

[LikeLinus]

Who does your taxes?

How is he wrong?

These aren't personal gifts. Gifts from an employer to employee (outside the context of employment) are generally taxable to the recipient as supplemental wages. In other words, the gifts are subject to both income tax and employment taxes. The value of the gifts must be reported on the employee’s Form W-2 for that year.

On a similar note, I just read an article yesterday about someone being on the Price is Right and he won 50k worth of prices. He was surprised when he was told he would owe taxes and it was approximately $15K to the IRS. Needless to say, he said he had to sell almost all that he won because he couldn't afford it.

Either the company is paying the taxes or you pay the taxes.

 

[Sukhoi]

I think the point that dasherHampton was trying to make was that this will end up being at most 1% of the money made in the deal (and that assumes most tickets are used and are used for expensive overseas trips). It is a nice gesture to employees, but it really isn't much money for them to give away. I've been in on a similar type of deal and walked away with a year's salary as a bonus, not just $10k and tickets.

The employees that made the company a success get ~1%. What percent of the deal did the deal brokers make? The lawyers for the deal? Is a 1% tip at a restaurant enough to make you feel that you deserve a pat on the back, because you don't have to leave any tip?

Yeah it'd be real interesting to know the terms of this exit. She sold the majority of the company so there's no more IPO on the horizon. Curious if anyone had stock options that are now void and replaced with $10K and a couple plane tickets lol.

 

[Lost_in_the_HTTP]

She's kinda cute.

 

[Mai72]

They won't be worse off but the tax bill to the Fed and the state will be around $10k. So that $10k cash they get? Government takes it. So that leaves them with 2 first class tickets. Great. They can enjoy the first class flight but then will have to pay for hotel, food, and spending from their own pocket since they had to use the $10k cash they got to pay taxes.


Yes, I'm sure all the employees have their finances in order. lol.

How is the state and federal government taxing them $10k on their $10k bonus. That makes no sense.

Per Google Search: "The IRS says all supplemental wages should have federal income tax withheld at a rate of 22%. So for a $10,000 bonus, you'd have $2,200 withheld in federal income taxes and receive $7,800. This is the simplest method, so chances are your employer most likely will withhold the percentage from your bonus "

That is federal. So, if this is correct than about $2200 will have to be paid in federal taxes. With state, that could vary but lets say it's about $900. I think this is probably on the high end, but lets go with it. Total would be about $3,100 in taxes (total), so they walk away with about $6,900 They can also opt to get that taken out by their employer (Spanx) immediately which would be a good idea.

 

[Mai72]

If I scored a billion dollar deal in this employment climate my 750 employees would be getting at least 50k. Maybe 100k.

Those employees didn't start the business. They didn't take on the risk, and the rejection after rejection after rejection that Sarah faced during the starting phase of Spanx. She started Spanx in her apartment, and often faced rejection. If you want to reap huge profits go start your own business and get back to us. You probably won't last a week. Starting and running a successful business like Spanx might look glamorous and easy. Its not.

 

[Lost_in_the_HTTP]

That is federal. So, if this is correct than about $2200 will have to be paid in federal taxes.

It isn't. That's the amount withheld at the time of payout. When you file your tax returns for that year, you may get some of that back as a Tax Refund, or you may have to pay more.

 

[LikeLinus]

How is the state and federal government taxing them $10k on their $10k bonus. That makes no sense.

Per Google Search: "The IRS says all supplemental wages should have federal income tax withheld at a rate of 22%. So for a $10,000 bonus, you'd have $2,200 withheld in federal income taxes and receive $7,800. This is the simplest method, so chances are your employer most likely will withhold the percentage from your bonus "

That is federal. So, if this is correct than about $2200 will have to be paid in federal taxes. With state, that could vary but lets say it's about $900. I think this is probably on the high end, but lets go with it. Total would be about $3,100 in taxes (total), so they walk away with about $6,900 They can also opt to get that taken out by their employer (Spanx) immediately which would be a good idea.

You aren't including the cost of two first class tickets. That is also taxable income. An open-ended round trip first class ticket is probably in the $10k range or more if it's international, but I'm going to be it's continental US only. So you're looking at tripling that $3.1k you quoted and you are around $9.3k.

Also, that isn't really the only tax you pay. I know this because my bonus gets taxed (aggregate method) at the highest rate of 35% every year. Yes, you will get some back during your refund, but you still have to pay it out when you receive the bonus. It's taken out automatically.

How Bonuses Are Taxed

Working hard all year to help your company meet its annual goals deserves a reward, and you've definitely earned that bonus. But bonuses count toward your income for the year, so they're subject to income taxes. Read on to learn how much tax you can expect to pay on your bonus—and for tips on...

turbotax.intuit.com

• The 6.2% Social Security tax on any portion of your bonus that's below the $142,800 Social Security cap for tax year 2021.
• The 1.45% Medicare tax

 

[pcgeek11]

You guys have convinced me.

She should have just kept the money....

/s

 

[LikeLinus]

You guys have convinced me.

She should have just kept the money....

/s

She shouldn't have run her mouth and try to attract attention to her self. Be selfless and give back to your employees, but don't ask for a pat on the back and to promote yourself for doing so.

 

[pcgeek11]

She shouldn't have run her mouth and try to attract attention to her self. Be selfless and give back to your employees, but don't ask for a pat on the back and to promote yourself for doing so.

I think she deserves a good pat on the back.