Any nonwage payment or benefit granted to employees by employers. Examples include pension plans, profit-sharing programs, vacation pay, and company-paid life, health, and unemployment insurance. Employers' payments for fringe benefits are included in employee-compensation costs and therefore are not usually taxed. If the cost of fringe benefits were paid directly as wages, the worker would pay taxes on this amount and therefore have less to spend when purchasing equivalent benefits independently.
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De Minimis Fringe Benefits are minimal or smallish perks provided by an employer.
Under Internal Revenue Code § 132(a)(4), “de minimis fringe” benefits provided by the employer can be excluded from the employee’s gross income. “De minimis fringe” means any property or service the value of which is (after taking into account the frequency with which smaller fringes are provided by the employer to the employer’s employees) so small as to make accounting for it unreasonable or administratively impracticable. As a practical matter, 134(a)(4) is a narrowly defined rule of administrative convenience.
For property or services to qualify as “de minimis fringe” benefits, it must be unusual or occasional in frequency; and the value cannot be a disguised form of compensation.
Generally, the Internal Revenue Service (“IRS”) considers the following three factors:
1.the frequency of the benefit;
2.the value of the benefit; and
3.the administrative impracticality.
If the property or services provided to the employee qualify as a “de minimis fringe” benefit, then the employee need not report the amount.
Fringe Benefit Group Adds Nationwide Investment Platform to the Contractors Plan; Retirement Solution Now Available to Contractors Working on ARRA Projects.(Company overview)
Jul 22, 2009; Fringe Benefit Group, an industry leader in group benefit plans designed specifically for hourly and part-time workers, announced...
Fringe Benefit Group Helps Government Contractors Cut Costs, Win Bids & Comply with New Health Care Legislation.
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Fringe Benefit Group Expands Limited Medical Plan Offering with Addition of Coinsurance-based Plan.(Company overview)
Oct 19, 2009; Fringe Benefit Group, an industry leader in limited medical benefit plans and health benefits administration, announced the...
Changes to FBT on motor vehicles: the recent Budget announced changes in the way that fringe benefit tax will apply to motor vehicles, effective from 1 April 2006. Tony Thomas looks at some of the implications.(on accounts)
Sep 01, 2005; In this column I have focussed on the value of the fringe benefit rather than the actual fringe benefit tax (FBT) payable. The...