What Is a Taxable Fringe Benefit?

A taxable fringe benefit is not just decorative. A taxable fringe benefit is a non-cash benefit that your employees get that is subject to taxes. This type of taxable non-cash compensation is also referred to as “imputed pay.” Taxable fringe benefits include things such as life insurance premiums above a certain amount, gym memberships, and moving expense reimbursements. 

It’s important to make sure taxable fringe benefits are taxed appropriately. Otherwise, a great benefit can turn into a burden. The value of these benefits is 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.