Determination is typically made in one of two ways: the ‘common law test’ or the ‘reasonable basis test’. It is the responsibility of the employer to determine a worker’s status, either as an employee or an independent contractor. You may call Customer Support for information on our processes in this regard, though we are not allowed to provide legal or tax advice. A few examples of taxable fringe benefits include bonuses, vacation expenses, frequent-flier miles earned during business use, converted to cash, and so forth.įor additional information about taxable and non-taxable fringe benefits as it applies to you, contact your accountant. It’s added to all taxable wages but not added to net pay. Taxable fringe benefits are fully taxable compensation for a benefit granted by an employer that has monetary value but does not affect basic wages. A few examples include employee discounts or stock options, job-related tuition assistance reimbursements, and retirement planning services.
This type of compensation is not subject to taxes and will not add to the net pay. This tax is added only to Social Security and Medicare taxable wages and does not add to the net pay.Ī non-taxable fringe benefit is granted by an employer that has a monetary value but does not affect basic wages. Fringe benefits may be FICA taxable, taxable, or non-taxable depending on scenario.įor example, a FICA-taxable only compensation is a benefit granted by an employer that has monetary value but does not affect basic wages.
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