This chapter discusses the following employee fringe benefits: employee discounts; no-additional-cost services; company cafeterias and meal plans; qualified transportation; qualified retirement planning services; gyms and athletic facilities; working condition fringes; and de minimis fringes. Advantages, tax implications, and benefits are covered. | In general, employees are not taxed on fringe benefits IF offered on a nondiscriminatory basis If only highly compensated enjoy the benefit, the value of the benefit is considered taxable income Copyright 2009, The National Underwriter Company Definition of Highly Compensated Any employee who, during the current or preceding year: Was at any time an owner of more than 5% of the business; or Received compensation from the employer in excess of $110,000 (in 2009, as indexed). Copyright 2009, The National Underwriter Company Fringe benefits are non-cash compensation benefits Employee discounts No-additional cash services Company cafeterias and meal plans Qualified transportation Qualified retirement planning services Gyms and athletic facilities “Working condition fringes” “De minimis fringes” Copyright 2009, The National Underwriter Company Employee Discounts Employee receives discount on retail merchandise sold Advantages for employer: Employees value discount Low cost to employer Promotes products Copyright 2009, The National Underwriter Company Employee Discounts Tax implications Employee discounts are excluded from taxable income IF discount: Is offered to employees in nondiscriminatory manner Does not exceed employer’s gross profit percentage Items are available to customers in ordinary line of business (real estate and investment products excepted) Copyright 2009, The National Underwriter Company No-Additional-Cost Services Discounted services provided to employees at low or no cost Advantages Services valued by employee Low or no extra cost to employer Utilizes excess capacity that generates no revenue Copyright 2009, The National Underwriter Company No-Additional-Cost Services Tax implications No-additional-cost services are excluded from taxable income IF discount: Offered to employees in nondiscriminatory manner Does not cost employer OR is Copyright 2009, The National Underwriter Company Definition of Highly Compensated Any employee who, during the current or preceding year: Was at any time an owner of more than 5% of the business; or Received compensation from the employer in excess of $110,000 (in 2009, as indexed). Copyright 2009, The National Underwriter Company Fringe benefits are non-cash compensation benefits Employee discounts No-additional cash services Company cafeterias and meal plans Qualified transportation Qualified retirement planning services Gyms and athletic facilities “Working condition fringes” “De minimis fringes” Copyright 2009, The National Underwriter Company Employee Discounts Employee receives discount on retail merchandise sold Advantages for employer: Employees value discount Low cost to .
