The conversation around employee benefits has never been livelier – considering the current job market scenario, employees are looking for benefits beyond healthcare. It’s not bad for the companies, either, as several options offer a tax break for them.
Tax-advantaged employee benefits are a specific kind of benefit that offers the possibility of saving money for both the employer and the employee, as neither of them needs to pay tax on it.
They can be pre-tax benefits that are considered benefits, such as healthcare. Or things the company can pay for as expenses that benefit an employee but are not benefits for tax purposes.
For all workers, this can include conferences, training, and employee lunches. For remote workers, it can include paying for home office equipment and home cleanings (to clean the home office).
Disability insurance is a good example of a tax-free benefit. As long as the company is paying the premium for which the employee is the beneficiary, that is not included in the employee’s income. If and when the employee receives any money from that policy, income tax will apply.
Companies can provide group term life insurance up to a certain amount and have it be tax-free.
Healthcare involves health insurance, vision, and dental. These are all tax-free.
Transportation includes parking and public transportation passes. Those are tax-free for employees but have different deduction rules for companies.
Companies can pay up to a certain amount for course and program tuition, books, and different fees for employees. Those are tax-free, as long as they’re within the limit bracket.
The covid-19 pandemic has changed the world for good, and it has made a significant impact on what employees are looking for. This means that companies need to be aware of changes and offer an attractive mix of tried and tested, traditional benefits, with new ones: ones that would most definitely have not been a part of benefits packages some years ago.
A couple of new ones that people have frequently been looking for are any and all related to mental health and well-being. If before the pandemic the trend of self-care was already booming, 2022 certainly puts a major focus on it: people know they need to be happy and healthy, and many are now reconsidering their relationship to work.
Studies have proven that humans are more productive in a clean, organized environment:
“The clutter also limits your brain’s ability to process information. Clutter makes you distracted and unable to process information as well as you do in an uncluttered, organized, and serene environment.” (The Princeton Neuroscience Institute)
For remote workers, house cleaning is a pre-tax benefit. That means it can be classified as janitorial expenses, which are 100% deductible to the company. Plus, those are tax-free for the employees, as well. For in-office workers, home cleanings can be offered as a fringe benefit, susceptible to tax on the employee side.
Either way, TIDY can help. Talk to us today.
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