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Situation is: I am owner and CEO of a company. We are terminating a young employee. I wish him no ill will but he has been non-performant for several months and had some personality conflicts with others in the company. He has been warned and failed to correct so the decision to fire him is made.

His company PC and Phone I know he uses as his primary devices.
We will collect them and reset the devices but I expect the device would mean a lot if I can leave with him.

Administratively what is the easiest way to grant it to him?
Cost wise I am fine just giving it to him provided we can factory reset the device to ensure all company files are removed.

I understand it is unnecessary and an act of kindness.
I wish to do this so a young man is not left without a job or his PC and Phone.
It was not so many years ago I could see losing my job and then having an unexpected expense would really hurt on a personal finance level and I have no desire to embitter a former employee. Rather I think he would say good things about us even after termination provided it is done properly and value the companies reputation.

Was thinking we could agree to sell it to him for a token sum and deduct it from his last paycheck assuming he agrees to this?

Anyone have a strong motive to not do this? We are in Sweden.

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    That might be question that you should ask your accounting department or person. They will need to make sense of it in the end and "sell" it to whoever checks your books.
    – nvoigt
    Aug 8 at 13:08
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    Not an answer to your question, but ask your accounting people for the book value of the equipment. Often it will be much lower than the market value, and would make sale of the equipment easy to justify.
    – Bob Brown
    Aug 11 at 13:34
  • Just an update. He was terminated. He did expect it to happen. He was surprised and happy that we gave him a far beyond legal minimum exit package despite him only working for us for 5 months. My local manager got his PC erased it and returned it to him. We had him sign a piece of paper making it his legally and will payroll deduct it is the plan. He wrote a very charming letter on his exit and all in all was one of the cleanest exits I have ever had. Wish him well and thank all of you for such excellent thought through advice!!!
    – JPK
    Aug 15 at 18:13

8 Answers 8

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There are a number of things to consider.

  • Taxes: make sure you understand the impact of the gift on the company and the former employee. The devices still have value, that may mean that the gifting of the devices counts as income.

  • Corporate intellectual property. Normally when an employee is being fired the company tries to protect the IP by not letting the fired employee retain access to the IP. This means network access is removed as well as corporate phones and computers. The collection of these devices will have to be done at the same time as the notice of termination.

  • Licensing. The corporate licenses generally can't be transferred to the former employee. The cost of obtaining new licenses will have to be figured into the cost of this gesture, as well as the tax impact.

  • Phone: if the employee has been using the corporate phone as their personal phone they may not have a cell service setup. Make sure that the phone will be usable, or it will be wasted money.

  • Other employees. Once other employees hear of this benefit, they may expect the same thing when they leave.

Make sure your feelings aren't putting your corporation at risk. Providing a service to help them write their resume is good. Giving them access to the office so they can job hunt is risky. You might find that there are 3rd-party services that can provide the assistance they need to find their next job.

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    while your answer is really well organized, I feel it's not really addressing the question. ("Administratively what is the easiest way to grant it to him?" "Anyone have a strong motive to not do this?") Aug 9 at 6:58
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    The phone number thing is pretty easy, the company needs to transfer the ownership of the number to the employee, and then they can move it to their desired provider. For PC Licenses, it depends which one you have. On windows you can run "slmgr.vbs /dlv". If it's a OEM lience it's probably fine to give that copy of windows away, if it's a "Volume" for your coperation, maybe not. Re taxes, it might be that you can sell old hardware for a low-ish non-token amount, maybe it could count as a Minnesgåva at the end of their employment, or maybe it's a taxable gift, I'm not sure. Aug 9 at 10:10
  • @NathanCooper Don't forget to make sure the phone is unlocked. Also I'm not sure how easy transferring the number will be. They might need to create an account at the same cell phone company at least. Aug 9 at 14:28
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    @CuriousWorker I see two strong motives to not do this: the possible accounting and legal issues (which the company might not otherwise have to deal with) and the effect on other employees. I would put the latter at the top of the list: if this is the sort of benefit that a non-performing and now-terminated employee gets, what sort of benefits should highly performing employees get? Aug 9 at 15:04
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    Regarding taxes, a past company I worked for had us buy office equipment as part of COVID work from home. When we bought the equipment we were told that "it would remain the property of the company, but for sanitation and safety reasons, we should "dispose" of the equipment for the company on separation" , I am not a tax lawyer or accountant but I believe that the company was trying to "be nice" while also avoiding any tax concerns.
    – Sam
    Aug 10 at 21:18
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I switched jobs this year and retained the notebook I was using at my old job, by simply buying it from my old company. A sale is the easiest administrative way of doing the legal transfer of ownership, as it's just a standard business act. You can set whatever price you feel is ok, even 1 krona. Since it's just another sale, all your usual processes, inventory update, etc. should pick it up and a normal bill can be created.

Do check with your tax advisor regarding the tax part. Nobody not familiar with the specific Swedish tax laws on that will be able to give useful advise.

Aside from the (obvious) wipe, check if you have anything that uses the MAC address of the machine as a factor, such as the company WLAN.

I also think you're doing the right thing. The world is small, and you always meet twice.

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  • +1 I bought twice my workstation laptop from my employer exactly as described here. The computer was sold with nothing installed, even no OS.
    – Tom Sawyer
    Aug 10 at 14:01
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Was thinking we could agree to sell it to him for a token sum and deduct it from his last paycheck assuming he agrees to this?

Sounds like a very nice thing for you to do! You might decide not to even collect a token sum.

Make sure you give him some time to back up his personal files to a thumb drive or such. Then wipe the devices and give them back. Make sure all software remaining on the devices have licenses that can be transferred.

Alternatively or additionally, you may want to grant this employee use of your office space while seeking his next job.

Consider the precedent you are setting with this action, since others may expect the same consideration.

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    If the computer etc is sold for a nominal sum then that is its value for tax purposes, otherwise it could be assessed as a benefit with the open market value
    – uɐɪ
    Aug 8 at 14:02
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    @uɐɪ It's not relevant to the question, but in most jurisdictions you can't change the tax valuation of something by selling it for a token amount. If you sold a $1000 laptop to an employee for $1 you have given them a $999 benefit, which may or may not be taxable. I don't want to get into a discussion - this is just to warn other people not to rely on this mechanism. Aug 8 at 14:27
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    @uɐɪ This doesn't seem right. In most countries, including Sweden, such benefits are typically subject to taxation at market value. Market value is not changed by a token payment. Aug 8 at 23:30
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    @MadPhysicist I don't see an extra 9 anywhere. Exactly as DJClayworth wrote, if you sell an employee a $1,000 item for $1, you've effectively given that employee a $999 bonus (the taxes on which will presumably be far less than $999). Aug 9 at 10:51
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    Don't forget that the item may have been depreciated to zero value - that may impact whether it has any income tax implications (depending on the country, I know nothing about Sweden).
    – Joe
    Aug 9 at 22:43
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Where I work, in Norway, we are offered to keep our old computers when they are replaced, typically every three or so years. The only condition is that the IT department wipes them first.

As far as I am aware this has no implication on my taxes, although as someone mentions in a comment to a different answer, the monetary value of a new computer might be considered differently - this is something you should likely check with whoever handles finances / legal at your company - while I suspect the law in Sweden and Norway won't be very different, it can be hard to figure out all the details without having a complete knowledge of the case.

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    Norway here, too - we used to have this before, but after we were bought by a large multinational, this is no longer the case for PCs and phones, not even for payment. Other electronics that would have been disposed otherwise are given away however, with no tax implications. Aug 9 at 13:27
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    I imagine in this case, the computers have already depreciated to $0 value, since they were being replaced anyway.
    – coagmano
    Aug 9 at 23:31
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Why not offer a severance payment that would cover the cost of a new computer (and then some). That seems like the simplest way to maintain good will with a fired employee and is the industry standard. Then you can leave more of the decisions to him. (as mentioned above he'd need to re-activate the phone anyway, he'd need to buy software licenses anyway, etc.)

Maybe he wants to switch from Mac to Pc or vise versa?

Giving away your old hardware is a good gesture. Giving him money to buy new hardware (or food) is probably a better one.

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    Obviously depends on country and relevant tax laws. But I've been given an old company laptop before. The company applies a hefty depreciation to the machines (not that in line with market values) then that depreciated value is treated as a taxable benefit. E.g. a 1.5 year old MacBook Pro being worth $600. In practice a second hand laptop is of limited value to company. New employee doesn't want it. Low resell value (companies are not going to mess around on eBay) to resellers. While value to employee is high. So it's win win Aug 11 at 8:20
  • There are false assumptions here. He picked his computer when he started under a year ago. Its a top end mac-book model and he has a brand new I-Phone. For his PC we encouraged him not to take since nobody else uses this type of PC professionally in our area of IT. As for why not offer a payment he already has a generous amount of time paid over a month without working until he leaves. This policy is above minimum and to gift him his equipment giving more than that is bad financial decision making.
    – JPK
    Aug 11 at 22:10
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Giving PC away to the employee might be a headache for your HR guy, because legally it will be most likely an income that should be taxed and subjected to health and rental insurance. Make sure they can handle that.

It would be much easier to sell the laptop. Used company laptops loose value very quickly, so it should be possible to sell cheaply without putting employee in any problem. On your side, it will be a trivial situation. It's a sell, so it's just an additional income on the company side. You take the hurdle from the HR to the bookkeeping, and the bookkeepers are qualified enough to handle that.

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  • Thank you, the advice to make it a sale instead of a gift has come repeatedly so we will get him to pay something for it. I think a payroll deduction would be smoothest but he probably needs to sign a paper on it. He have already received his notice and signed the exit papers maybe we need to make another for the cost of the PC and Phone.
    – JPK
    Aug 11 at 8:51
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If you have a way to ensure that it's "wiped" such as a remote wipe utility, then what you decide is entirely up to you and/or your company policies. Whether it's viewed as taxable income by the taxing authority is a problem for your company's accounting department.

If you have no way to ensure that it's wiped, then you should insist that it be returned so that it can be processed using whatever process is established for your company.

Generally I would say that it's NOT your responsibility to make sure this person has a laptop or a phone. If he chose to rely on the company-provided resources than that's been his choice not yours. The fact is that your company provided those resources for its own benefit, not the employee's benefit. Now that he's terminating he can make his own arrangements.

I know that seems like a "hard line" but I think you open yourself up to more headaches for no benefit to the company by giving this laptop away even if the plan is to dispose of it once it's back in your hands.

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    We are an IT firm we can empty his PC remotely no problem. Agree its not our responsibility its more a decent thing to do.
    – JPK
    Aug 8 at 20:47
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I can't weigh in on the employee relations side of this really, but I would say that given the situation is already slightly messy I would suggest that the most secure way to ensure that absolutely no trace of anything is recoverable from your laptop is to remove the hard drive.

Buying a new hard drive these days is not unreasonable financially and in my opinion this way you can be sure that you physically have all the data relevant to your company

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    That assumes it's removable in the first place. Some thin laptops these days have the SSD soldiered to the main board. Aug 9 at 10:56
  • And the phone the OP mentioned definitely has the hard drive soldered to the mainboard.
    – Sneftel
    Aug 10 at 8:38
  • @DanIsFiddlingByFirelight You're thinking of RAM or a Chrome book (which aren't used in business settings)
    – Jack
    Aug 10 at 9:17
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    @Jack no I was not thinking of ram (which is more likely to be soldiered), and while soldiered SSDs are more common on lower end laptops including Chromebooks (which are used by some businesses that are all in on web based tools) with eMMC based storage some high end laptops including Apple's soldier PCIe based SSDs too. Aug 10 at 10:55
  • As you say, those tend to use web apps so a reset would be sufficient. If this is a trend tho, the use of MAC addresses for network access becomes a problem.
    – Engineer
    Aug 10 at 21:05

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