Gift Turkeys and Hams are not considered income to the employee.

Gift Turkeys and Hams are not considered as taxable income an employee. Additionally, the corporation giving the gift does not have the liability of matching taxes.

The following is taken directly from the Internal Revenue Service Publication 17:

Holiday gifts. If your employer gives you a turkey, ham, or other item of nominal value at Christmas or other holidays, do not include the value of the gift in your income. However, if your employer gives you cash, a gift certificate, or a similar item that you can easily exchange for cash, you include the value of that gift as extra salary or wages regardless of the amount involved.

View the IRS publication relevant pages (2 pages)

View the entire IRS publication from the IRS site (292 pages)