What are Taxable Fringe Benefits?
Similar to how ordinary employee pay are reported, taxable fringe benefits are also reported. Taxable fringe benefits may include company-provided vehicles, bonuses, and group term life insurance.
Basic goods are included as common fringe benefits in employee’s packages. These consist of benefits including life insurance,health insurance, financial aid for school, cafeteria subsidies, loans at below-market rates, childcare reimbursement, employee discounts, employee stock options, and the use of a corporate vehicle for private use.
Are all Fringe Benefits Taxable?
In general, unless the law specifically exempts it, any fringe benefit offered is taxed and must be included in the employee’s compensation. If a fringe benefit is taxable, it is one that is reported on Form W-2 and is paid into the employee’s salary.
Now, there are some restrictions on certain forms of fringe benefits imposed by labour laws and employment regulations. As we are all aware, some are taxed and some are not. Then there are those that the organisation must adhere to by law.
What are Non-Taxable Fringe Benefits?
Taxes are paid on taxable income, which are kept on record. Inspite the fact it is nontaxable income may be needed to be shown on your tax return.
On-site food and recreational amenities, assistance with adoption, health insurance, disability insurance, and financial aid for education are all examples of nontaxable fringe benefits.
Other non taxable fringe benefits include:
- Benefits of Professional Development.
- Tools for Productivity.
- Benefits for Transportation and Equipment.
- Internet Bonuses.
- Health Advantages.
Also, see: Voluntary Benefits