You want to offer life insurance, gym membership, or wellness benefits?
Fringe Benefits are great offerings for your team, they are rarely tax-deductible but are still business expenses.
Fringe benefits are considered non-cash compensation and are taxed as regular wages. These taxable "wages" are called imputed pay. Examples:
- Moving expense reimbursements
- Gym memberships and fitness incentives
- Personal use of a company car
- Educational assistance and tuition reduction
- Employee discounts
- Employer-provided cell phones
Imputed pay is added to an employee's gross wages for taxability purposes only. It will not be included in the employee's net pay since this benefit was already compensated in another form.
You should account for them through Gusto (read: for taxes) but will need to have the benefit itself set up separately. This can be set up through another company that offers the service or you can have the team member handle it themselves and set up recurring reimbursements instead. Just make sure that they are taxed appropriately.