No. Am not going to skirt payroll taxes by giving my employees "gifts". Based on your sage advice, I've decided against this idea
However, based on your information, what would stop an employer and employee from cooperating together, to pull off such a stunt ? I mean, that saves the employee taxes, and saves the employer taxes. In the same way that "gifts" from a one friend to another are tax free, and since my employees are also my "friends", then .... that would seem like a win-win. Eh ?
I recall, years ago, getting ready to give my employees their Christmas bonuses: A few crisp Benjamins tucked into their Christmas cards. My accountant told me that this would also be subject to payroll tax. So I just ... uh ... "laundered" it in another fashion (chalked the petty cash up to some other expense) and handed out the "gifts" anyhow.
But no .... I'm not planning on doing it.