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DGR salary donation

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Newbie

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If an employee who works for DGR company voluntarily reduces their pay as a way of helping charity/DGR in these difficult times, would this be a donation made by an employee for tax purposes? The money hasn't changed hands, but the company has saved money by not paying full wage. If so, would the company have to process GJ to record this as a donation?
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Devotee

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As the funds were not the employee's money, the employee has not made a donation. The employee would need to have first received those funds, as salary, and then repaid them for the amount to be considered a donation.

 

The employee is effectively getting a tax deduction for the forgone amount, as they only have to pay tax on the reduced salary.

1 REPLY 1
Highlighted

Most helpful response

Devotee

Replies 0

As the funds were not the employee's money, the employee has not made a donation. The employee would need to have first received those funds, as salary, and then repaid them for the amount to be considered a donation.

 

The employee is effectively getting a tax deduction for the forgone amount, as they only have to pay tax on the reduced salary.