Benefits

What is a taxable fringe benefit?

A taxable fringe benefit is not just decorative. These are non-cash benefits that your employees get that are subject to taxes, and it’s important to make sure these are taxed appropriately, or else a great benefit can turn into a burden.

Also referred to as “imputed pay,” a taxable fringe benefit is the value of non-cash services or benefits that employees receive that is subject to tax. These “services or benefits” can include things like life insurance premiums above a certain amount, gym memberships, or moving expenses. The value of these benefits are typically reported to the IRS using form W-2 at the end of the year, and can also be reported on pay stubs.

This article provides general information and shouldn’t be construed as legal, benefits, or HR advice. Benefits and insurance regulations may change over time and may vary by location and employer size. So, please consult a licensed broker or appropriately certified expert for advice specific to your business’s benefits options.