What You Need to Know about Fringe Benefits and Imputed IncomePosted on December 09, 2016
As you prepare for the end of 2016, Paycor is providing you with some helpful information to assist in explaining how to process Fringe Benefits and Imputed Income.
What is Imputed Income?
When an employee receives non-cash compensation that is considered taxable, the value of that benefit becomes imputed income to the employee. Imputed income is added to the employee’s gross (taxable) income, but is not included in the net pay because the employee has already received the benefit in some other form.
What is a Fringe Benefit?
A fringe benefit is a form of pay for the performance of services. For example, you provide an employee with a fringe benefit when you allow the employee to use a business vehicle to commute to and from work. The IRS has provided us with an “Employer’s Tax guide to Fringe Benefits” to use in 2011 as an overview of all benefits, exclusion rules, valuation rules, withholding, depositing or reporting.
Follow this link to see the 2016 15-B publication – The Employer’s Guide to Fringe Benefits provided by the IRS.
Contact us and we’ll be happy to learn more about your current processes and walk you through a demonstration to show how Paycor can help you become more efficient.
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