What are fringe benefits?

Put simply, fringe benefits are an additional benefit or form of pay on top of an employee’s salary for work performed. They’re the same as perks and can range from a company car to team meals out on the town.

Check out the IRS' Employer's Tax Guide to Fringe Benefits, for more information.

Are fringe benefits taxable?

Yes, all fringe benefits are taxable. The value of a fringe benefit is subject to federal income tax, Social Security tax, Medicare tax, and FUTA, and the value must be included in Boxes 1, 3 and 5 of Form W-2, and on line 3 of Form 940. However, the taxable portion of a fringe benefit may be reduced by the following amounts:

  • Any amount that the law excludes from compensation; and
  • Any amount that the recipient pays for the benefit.

How are fringe benefits reported to Justworks?

So that we can accurately file your taxes, you need to report the total taxable amount of any fringe benefit you’ve given to your employees by contacting your Account Manager or support.

You don't need to report New York Health and Racquet Club and Citi Bike memberships that you offer through Justworks. We already know and take care of that for you.

Disclaimer

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.

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