Gym membership fringe benefit Health club or gym memberships are also considered a deductible fringe benefit. Check out this post to see how these rewards can can increase employee loyalty, productivity, and commitment to their employer. When the employer provides membership to an off-site club at no additional cost to the employee. Jul 24, 2025 · Key takeaways: Fringe benefits are a form of compensation that employers give to team members in addition to their regular salary. Are gyms tax deductible? Office fitness and health While you can’t deduct gym memberships for employees, if Sep 17, 2020 · Employers that provided on-site gyms or other athletic facilities to their employees as a pre-pandemic wellness benefit may wish to pay for gym memberships or virtual trainer services for work . Jan 11, 2024 · Fringe benefits are monetary and non-monetary benefits employers offer to boost employee morale and reward their work performance. The IRS generally treats employer-paid gym memberships as a personal expense rather than a business-related deduction. 213 (e. Jul 17, 2023 · What are fringe benefits? Fringe benefits are a form of compensation given to employees that goes beyond their normal wages and pay. Other wellness rewards, such as small gifts or reduced cost sharing under a Apr 11, 2025 · This is definitely a common question with employee benefits! You're right that gym membership reimbursements are generally considered taxable fringe benefits that need to be reported on W-2s. Apr 4, 2024 · Australia’s peak health and fitness body, AUSactive is suggesting the government tackles the national obesity crisis by making gym memberships tax deductible. Jul 1, 2025 · What are fringe benefits? How are they the key to improving employee retention and attracting star talent? Learn everything there is to know about fringe benefits here. Apr 9, 2013 · Gym memberships do not generally constitute medical care under Code section 213 (unless the gym membership is prescribed by a doctor to treat a specific disease) and receiving a cash reimbursement for a gym membership would not qualify as a nontaxable benefit under Code section 132. $600. Jul 11, 2016 · Wellness incentive cash payments and “cash equivalents”—ranging from gift cards to subsidized gym memberships—are not excludable from taxation as a medical benefit, the IRS is reminding See full list on marshmma. Nov 7, 2025 · The truth is, many employees today want more than a simple gym membership, a meditation app subscription, or some other one-size-fits-all wellness benefit. However, if the gym is located on the employer's premises and is primarily used by employees, it may be excluded from taxation. Jul 24, 2025 · The benefits are subject to income tax withholding and employment taxes. The exemption applies if the following conditions Employers offering gym memberships as part of employee benefits must consider the tax implications: Non-Taxable Fringe Benefit: If the gym membership is provided for the convenience of the employer and is offered to all employees, it may be excluded from employee income. If you operate a gym or similar facility on the Sep 15, 2023 · Employers: Would your employees appreciate health club memberships as a fringe benefit? It’s worth considering, but there are tax rules and compliance considerations. b. For the vast majority of industries, a gym membership would not qualify as ordinary and necessary to running the business. With help, you can chart a course through even the most complex tax issues and diligently leverage tax laws to your advantage while improving your company’s employee retention rate using Oct 26, 2021 · Our company pays for employee gym membership, but we do it directly with the gym so the membership shows up in our bank statements and in Quickbooks. Nov 6, 2025 · Encourage employee wellness with a corporate gym reimbursement program. The proposal to make gym memberships exempt from Fringe Benefits Tax legislation has been Analysis In the case of Bill’s gym membership, the FBT liability depends on whether the membership qualifies for exemption under the Act. Learn about taxable benefits and IRS rules in this employer guide. The two main federal tax exemptions that apply to wellness incentives are the exclusions for medical care and employee fringe benefits. 1. i think i know what you are thinking and it's not going to work. May 14, 2025 · DEDUCT GYM MEMBERSHIPS – Health club or gym memberships are also considered a deductible fringe benefit. Mar 31, 2021 · Our company pays for an employee's gym membership. Discover steps to set up a fitness reimbursement plan at work. If you’re a sole proprietor or single member LLC, then you can deduct gym memberships in the “Expenses” section of Schedule C. 125. Explore how employers use them to attract and retain top talent. When the on-site gym is open to employees and the general public. Fringe benefits are also known as noncash compensation programs. 5 days ago · Fringe benefits, such as sick leave and gym memberships, can promote a healthy lifestyle and protect all employees from spreading illness. This benefit is provided at no cost to him and is available exclusively to employees and their families at the corporation's premises. They want flexibility, personalization, and a program that truly aligns with their lives. All items in a cafeteria plan are exempt from Social Security and Medicare taxes. Jul 22, 2019 · Fringe benefits are a way to compensate your employees beyond their regular wages. , Fringe benefits and employee satisfaction have no correlation. Read on for some unique ideas. Mar 4, 2025 · According to the writers at Brigade, the IRS considers health club or gym memberships to be deductible fringe benefits. A fringe benefit rate represents the total cost of all fringe benefits you provide, expressed as a percentage of an employee's wages. See a case study example about when gym membership provided to employees may be a minor benefit exempt from fringe benefits tax (FBT). Entertainment is being provided The gym membership is recreation entertainment. Here are a few examples of fringe benefits in the wild: Stock options Health savings accounts (HSAs) Commuting assistance Cell phones Gym Mar 28, 2025 · Fringe benefits are perks that employers provide to employees in addition to regular wages, such as discounts, free services, or access to company facilities. Some incentives are considered non-taxable employee benefits, while others fall under the taxation of health insurance benefits and are considered taxable compensation. If you’re in a partnership or multiple-member LLC, use Form 1065. You Feb 28, 2025 · Fringe benefits are additions to compensation that employers offer workers to recruit, motivate, and retain high-quality talent. generally, business does not get tax benefit for "perks" unless they are offered to all non-officer employees. Ordinary and necessary does not mean "essential" but it must be part of the recognized cost of doing that kind of business . Nov 1, 2016 · How about other cash rewards paid to employees as part of a wellness program, such as payment for gym membership fees, and other fringe benefits? Regs. E. Details here. Examples of optional fringe benefits include free breakfast and lunch, gym membership, employee stock options, transportation benefits, retirement planning services, childcare, education assistance, etc. discover Health Club Membership Fringe Benefits. The IRS regulates how these benefits are taxed under 26 USC 132, determining whether certain perks can be excluded from an employee’s taxable income. The latest news on health, fitness and wellness programs. The cost is $480 per person. To attract new team members to your business, you may want to offer benefits beyond health insurance and retirement. Proper documentation and clear business purpose are essential. Mar 31, 2021 · Let me provide you with some information about entering fringe benefits in QuickBooks Online, Merideth. However, if they are provided for general health and wellness purposes, they may be considered taxable income. 3 2. Jul 18, 2016 · The gym membership fees mentioned in the Memo that are not medical care under IRC §132 are not excludable from employee’s income even if offered through a wellness plan since the fees are considered a cash benefit that is not excludable as a de minimis fringe benefit. This seems like an exception to the standard fringe benefits rules. Sep 24, 2025 · Some examples of common fringe benefits are employer-paid group term life insurance, taxable gym memberships, and taxable transportation benefits. Read this post to learn more about why you should offer this popular benefit! Sep 15, 2023 · Indeed, employers can generally offer such memberships as a taxable fringe benefit. The Wellness Word blog covers fitness benefits, gym reimbursements, fitness challenges, and more! Knowledge: Toast Payroll: Record Taxable Fringe BenefitsFields Jul 4, 2016 · July 4, 2016 2016 Fringe Benefits Tax Series: #3 Let’s Get Physical! The statutory requirements for on-site athletic facilities are precise. and more. That’s a really huge difference: executives only or primarily rank Do you enjoy company perks, like dental insurance, a gym membership, or a company car? Find out how how these fringe benefits are treated by the IRS. It isn't a standard offering from companies as part of their compensation package, but it allows for employees to save money on membership fees Jan 22, 2025 · Discover fringe benefits meaning, types, tax implications, and advantages to enhance employee satisfaction and retention. However, the employer payment of gym membership fees that does not qualify as medical care as defined under section 213(d) would not be excludible from the employee’s income, even if provided through a wellness plan or program, because payment or reimbursement of gym fees is a cash benefit that is not exclud Study with Quizlet and memorize flashcards containing terms like If an employee receives more than _________ in education assistance from their employer, it must be reported as taxable income on Form W-2. The GHP provides preventive care benefits such as reimbursements for the cost of flu shots and other vaccinations, without any cost sharing (thanks to the Affordable Care Act requirements). The likely explanation for what your new hires experienced is that some companies do Apr 11, 2025 · Offering Gym Membership Reimbursement as Employee Benefits - Tax Implications on W2 I'm the HR director at a mid-sized tech company, and we're planning to introduce gym membership reimbursements as part of our wellness initiative. In most cases, no— gym memberships are not tax-deductible when provided to employees as a benefit. The IRS typically does not allow taxpayers to deduct gym memberships or other costs associated with general health and wellness due to their location or operations. Fringe Benefits Tax Exemptions Some benefits are exempt from Fringe Benefits Tax. Oct 9, 2024 · Perks like gym memberships, on-site amenities, and employee discounts are excellent examples of fringe benefits. S-Corps can deduct gym memberships only if they qualify as a legitimate business expense, such as promoting employee wellness. Permanent employees include full-time, part-time, and permanent intermittent employees. Canadian employers, therefore, must carefully navigate fringe benefit tax rules to ensure full compliance with those tax laws. These non-salary offerings — like gym memberships, tuition reimbursement, or commuter passes — are designed to support your employees' overall wellbeing. As mentioned by , you can create an additional pay type for the employee's gym membership. There are many different types of fringe benefits, including retirement plans and health club memberships. Feb 18, 2025 · Workers could foot the tax bill for employer-provided benefits like parking, gyms, and meals. What fringe benefits are reportable as income? On the other hand, taxable fringe benefits are bigger, more regular rewards— higher value and more meaningful. Apr 9, 2024 · An employer provides comprehensive health benefits through a group health plan (GHP). Reimbursements of all or a part of health insurance premiums paid through an employee’s salary reduction, including through a cafeteria plan under Sec. The only way to avoid paying this tax is if employees are given access Dec 14, 2024 · The fringe rate or fringe benefit rate is the percentage of an employee's salary that goes towards fringe benefits. Find articles on fitness, diet, nutrition, health news headlines, medicine, diseases Nov 4, 2024 · The key takeaway from these examples is that they are lower-value benefits and are not given with repeated frequency. It’s worth noting that tax rules vary for an on-site gym or athletic facility, where the value provided to employees generally doesn’t count toward their gross income. For example: On-site fitness facilities and gym memberships Healthy snacks and meals provided in the workplace Incentives and rewards for participating in wellness activities (up to certain limits) The reporting requirements and tax implications associated with fringe benefits vary by benefit and the type of person receiving the benefit — e. 132-6 includes a de minimis fringe exception. Jan 12, 2023 · Example: gym membership A conveyancing firm pays for a one-year gym membership for the company's director and each employee. Even though paying for an employees gym membership to an external facility is considered “entertainment” and attracts the Fringe Benefits Tax, if a company has an on-site fitness facility, this is exempt from the FBT. Understanding these tax rules is important for both employers and employees to ensure Under what condition is an employer-offered gym membership fringe benefit taxable? Mar 24, 2025 · Lana Dolyna, EA, CTC 7 min read Share this post Yes – taxable benefits are included in employment income under U. Corporate gym memberships are a great fringe benefit, that most companies love. The IRS explains that fringe benefits are benefits that are included in an employee’s gross income and subject to income tax withholding and employment taxes, with a few exceptions. Oct 9, 2024 · If an S-Corp provides wellness or gym memberships as a fringe benefit, the value of those memberships would likely be treated as taxable income for employees who own more than 2% of the company and potentially other family members. $0. That means the membership would fall under a taxable fringe benefit – which means it’s deductible to the business owner, but it’s includable in the payroll of the employee. Which IRS publication contains details about fringe benefit tax treatment? Fringe benefits (often just called “perks” or employee benefits) refer to any extra benefits an employee receives beyond their standard wage or salary. Jul 1, 2025 · DEDUCT GYM MEMBERSHIPS – Health club or gym memberships are also considered a deductible fringe benefit. Feb 28, 2024 · The sheer complexity of Canadian tax laws can make compliance a challenge. But for employers and employees alike, those extras can quietly trigger SARS red flags if they’re not handled by the book. 125 cafeteria plan are gross income and taxable wages to the employees when payment is made. Fringe benefits include cars and flights on aircraft that the employer provides, free or discounted commercial flights, vacations, discounts on property or services, memberships in country clubs or other social clubs, and tickets to entertainment or sporting events. Businesses normally offer fringe benefits to attract talented employees and set themselves apart from rival employers. 3. Employers are providing more incentives for employees to take care of their health and in return, are realizing significant benefits. Health Club Memberships • If employer pays for a fitness program at off-site hotel, athletic club, etc. According to a 2023 IRS compliance study, nearly 30% of businesses misreport employee benefits, risking hundreds in IRS penalties for each oversight. Nov 1, 2023 · The IRS’s Chief Counsel Advice 202323006 clarified that wellness benefit payments paid to employees from a fixed-indemnity wellness plan structured as a Sec. May 1, 2000 · 3. On-site gym or other athletic facilities provided by the employer may be excludable. Answer The following fringe benefits are generally excluded from taxation: Off-site gym membership: This is typically considered a taxable fringe benefit. For employees who are not shareholders, this may still be a deductible business expense. For example, if you pay an employee $50,000 in salary and spend $10,000 on their benefits, your fringe benefit rate is 20%. Cash and cash equivalents (for example, gift cards) are a common type of wellness incentive that are always taxable. The cost of the membership is $60/month which is completely paid for by James' employer for all employees. 4 Wow. Oct 31, 2025 · No, fitness reimbursements may be tax-free if they qualify as a working condition fringe benefit. The IRS is pretty clear about this - unless a benefit qualifies for a specific exclusion, it's taxable income. Nov 6, 2025 · Why do companies offer gym memberships? Well-intentioned employers everywhere are offering gym memberships to their employees as a fringe benefit and for good reason — benefits like this make it easier to recruit and retain employees and may even lower healthcare costs for employers. May 30, 2024 · Gym memberships: Providing gym memberships to employees is an easy way to demonstrate that you care about the health and well being of your employees. The minor benefits exemption doesn't apply, because the cost of the gym membership Feb 19, 2025 · Tax Implications of Fringe Benefits Certain fringe benefits are taxable, while others may be tax-exempt under IRS guidelines. Nov 1, 2023 · For starters, the value of fringe benefits generally constitutes taxable income to employees, except in situations where a specific tax code provision exempts the benefit from tax. Oct 8, 2025 · For example, if an employee’s family member benefits from a company-sponsored gym membership, the employee will still be considered the fringe benefit recipient. , the value is included in compensation Employers who offer gym memberships, membership reimbursement, or access to on-site fitness facilities to their employees as part of a benefits package may ask themselves, "is gym reimbursement a Sep 15, 2023 · With the arrival of fall, many employers might be pondering whether they should change up their fringe benefits next year. Our plan members get more than just coverage HealthPartners health insurance members enjoy a range of perks, special programs and discounts. How much, if any, must James include in his yearly gross income related to this fringe benefit? a. Sep 25, 2025 · Certain benefits, such as health insurance and retirement plans, are tax-deductible for the employer, while others, such as transit passes and gym memberships, are tax-free for the employee. Consult IRS guidelines on fringe benefits and ensure compliance Aug 21, 2025 · Learn what fringe benefits are, their types, tax rules, and reporting requirements. May 7, 2024 · Are Gym Memberships for Employees Tax Deductible? In the US, employee gym memberships are often considered taxable fringe benefits. Oct 1, 2017 · Noncash rewards or other benefits that are not medical care as defined by Sec. However, there are two major exceptions where a gym membership could become tax deductible: (1) if it’s a medical necessity prescribed by a doctor, or (2) if it’s a business-related expense for certain self-employed individuals or companies. For owner-employees, the IRS often views gym memberships as personal expenses unless part of a formal, nondiscriminatory wellness program. However, with some limited exceptions, you can deduct the fringe benefit’s cost regardless of whether the benefit is taxable to the employee. , employee, partner, member or shareholder. federal tax law. Under what condition (s) would a gym membership fringe benefit be taxable (select all that apply)? Multiple select question. Jun 2, 2025 · Bottom line: In most cases, your gym membership is a personal expense that won’t lower your taxes. 2 What is the policy on reimbursement of fitness center membership fees? If you are a permanent Service employee, we will reimburse 50 percent of your individual membership fee for a commercial, non-federally sponsored, fitness center, up to $300. But the ATO thinks that gym memberships are a form of entertainment for employees and that businesses should pay fringe benefits tax on them. , payment of gym membership, unless, based on the facts and circumstances, it would be a medical expense under 213 (d). Jul 23, 2025 · A gym membership here, a discounted staff loan there, fringe benefits feel like the cherry on top of your paycheck. It might take the form of a paid gym membership, or discounted private health insurance. Dec 3, 2019 · In this scenario, James receives a gym membership as a fringe benefit from his employer, which is valued at $60 per month. From reduced prices on gym memberships to travel assistance and more, we’re here to help you make the most of your plan. The value of an on-site sporting facility run by the employer and utilized mainly by staff members may be deducted from the employee’s taxable income. Fringe benefits, or lifestyle benefits, play an essential role in employee recruitment & retention. $720. , Which statement best describes the purpose of fringe benefits?, De minimis fringe benefits include ________ and more. Mar 24, 2025 · Similarly, reimbursing an employee for their personal gym membership or providing free tickets to an event as a reward are taxable fringe benefits, not tax-free gifts. Employee Fringe Benefits Certain components of wellness programs can be classified as tax-free fringe benefits for employees. Feb 25, 2022 · Is Country Club Membership A Fringe Benefit? An employee who is entitled to fringe benefits, which are not cash compensation, may be the employee of an employer. Indeed, employers can generally offer such memberships as a taxable fringe benefit. They ensure a positive work environment and make employees feel valued and appreciated. Under what condition (s) would a gym membership fringe benefit be taxable (select all that apply)? Sep 15, 2023 · These memberships can typically be provided as a taxable fringe benefit, meaning the membership’s value would be considered part of each recipient’s gross income. $60. com Sep 18, 2025 · Whether it’s structuring memberships as part of a formal wellness program, facilitating HSA/FSA reimbursements for medically necessary fitness costs, or treating them as taxable fringe benefits, the right approach depends on your specific business situation. ) Feb 20, 2023 · Many employers offer a gym membership or access to fitness classes or centres as a part of their benefits package. According to IRS guidelines, qualified fringe benefits that are provided for the convenience of the employer and are used primarily by Jun 13, 2025 · Enhancing Company Culture: Offering fringe benefits also enhances company culture by promoting a supportive and inclusive environment. When the gym is available to employees only on the employer's premises. Under what condition is an employer-offered gym membership fringe benefit taxable? Multiple Choice When the employer has on-site gym facilities that are open to public use When the employer has on-site facilities that are only available to employees When the gym membership is not on the employer's premises or added to an employee's taxable compensation When the gym membership is a required Under what condition (s) would a gym membership fringe benefit be taxable (select all that apply)? When the employer provides membership to an off-site club at no additional cost to the employee. d. Employees – FBT applies FBT applies to the gym memberships for the employees. Meal subsidy: If you have cost-effective Jun 13, 2016 · Cash payments (even small amounts such as $10 or $25) for participating in a wellness program. Think of it as a “fitness” benefit, rather than fixating on the word gym. Examples of fringe benefits like gym memberships and mental health support demonstrate a company's commitment to employees' holistic well-being. Mar 13, 2025 · Explore the meaning of fringe benefits: definition, types, and examples. ‍ 2. Instead of direct cash pay, these are indirect forms of compensation that improve an employee’s work life or financial well-being. Picture the personal use of a company car, or that coveted gym Nov 21, 2023 · Gym memberships are an example of a fringe benefit. this keeps people from deducting what would otherwise be personal expenses through their business. For example, a company might provide health insurance, retirement contributions, or a paid gym membership How do fringe benefits work? Fringe benefits encompass many offerings, from traditional health insurance and retirement plans to unique perks like free gym memberships or pet-friendly workplaces. medical care under section 213(d). 1 Introduction The Taxable Fringe Benefits Guide was created by the Internal Revenue Service office of Federal, State and Local Governments (FSLG) to provide governmental entities with a basic understanding of the Federal tax rules relating to employee fringe benefits and reporting. Considering an employee gym at your office? Here is what you need to know to deduct the cost, and avoid your employees paying income tax on the benefit. Currently, tax deductions for gym memberships are only available to persons whose occupation requires a high fitness standard to be maintained. That is, the value of the membership would be includable in each participant’s gross income. Read on to learn why! May 28, 2016 · However, the employer payment of gym membership fees does not qualify as medical care as defined under section 213 (d) and would not be excludable from the employee’s income, even if provided through a wellness plan or program, because payment or reimbursement of gym fees is a cash benefit that is not excludable as a de minimis fringe benefit. Mar 5, 2025 · DEDUCT GYM MEMBERSHIPS – Health club or gym memberships are also considered a deductible fringe benefit. If you’re thinking about doing so, one option to consider is offering health club memberships to employees. Gross income does not include the value of a de minimis fringe provided to an employee. Sep 15, 2025 · Employees benefit from the flexibility to invest in their well-being through gym memberships, fitness classes, or mindfulness programs. , Fringe benefits are always part of an employee's cash compensation package. Jan 16, 2023 · Why do companies offer gym memberships? Well-intentioned employers everywhere are offering gym memberships to their employees as a fringe benefit and for good reason — benefits like this make it easier to recruit and retain employees and may even lower healthcare costs for employers. Nontaxable Wellness Incentives The tax treatment of wellness incentives depends on how the IRS classifies them under fringe benefit rules. Providing gym memberships to employees can be a great perk, and there are ways to structure this benefit to minimize tax implications for both the employer and the employee. Which of the following is true about employer-provided snacks and meals? Occasionally provided snacks and meals are considered de minimis. According to section CW 34 (1) (e) of the Act, a fringe benefit provided to an employee for the purpose of promoting their good health is exempt from FBT. Yes, but it almost certainly covers more than a gym membership - classes, personal trainers, etc. Taxable benefits include: Cash bonuses Personal use of a company vehicle Gym memberships (unless provided onsite) Non-taxable fringe benefits include: Health insurance Employer contributions to retirement plans Tuition assistance up to IRS limits Employees should review Many organizations are looking for inclusive types of fringe benefits for their diverse workforce, whether it’s family care, subsidized gym memberships, or pension plans. Create the best wellness program for your employees while avoiding all the common pitfalls. Feb 11, 2011 · Based on the information you provided the monthly gym membership you propose giving to your employees does not fit the definition of an athletic facility fringe benefit, nor does it fit the Jun 28, 2016 · Visit the gym weekly and the cost of your membership is covered. By offering gym memberships as a fringe benefit, employers can potentially claim deductions under the Internal Revenue Code. Fringe benefits like mobile phone, internet, or gym allowances, lodging, meals, transportation (commuter), tuition, GTLI, PUCC, S-Corp medical The corporation provides its employees with a no-cost gym membership at the local public YMCAs. You can rename specifically to Gym's membership or change the pay type beside the pay type's name. Now, let us explore some successful wellness stipend examples. It varies across industries and job positions. Examples include a company car, paid time off, and a gym membership. (Note: The tax rules for an on-site gym or athletic facility are different. Non -cash rewards, incentives or other benefits that are not medical care as defined under Code section 213. , gift cards or gym memberships that are not medically necessary). If the recipient of a taxable fringe benefit is your employee, the benefit is generally subject to employment taxes and must be reported on Form W-2, Wage and Tax Statement. Apr 5, 2023 · Gym Membership Deductions For Small Business Owners Small business owners can potentially reap tax benefits by providing gym memberships to their employees. What qualifies as a business tax write off? Nov 27, 2023 · However, as indicated in the current version of IT-470, Employees’ Fringe Benefits, if an employer pays the fees required for an employee to be a member of a social or athletic club, the employee is not considered to have received a taxable benefit when the membership is principally for the employer’s advantage rather than the employee’s. Apr 1, 2024 · It's part of a three-point preventative health plan that would see an expansion of fringe benefits tax (FBT) incentives for corporate gym memberships and fitness initiatives. Start your gym reimbursement program off with zero mistakes. Learn how to pay and track fringe benefits on your employees’ paychecks in QuickBooks Online Payroll and QuickBooks Desktop Payroll. Benefits such as paid time off encourage employees to have a better work-life balance and can improve their overall happiness. Sec. According to PPC Compensation Planning for Small Business, you must make the gym benefit available primarily to employees who are not highly compensated or owners. They boost job satisfaction, help you stand out in a competitive job market, and show your team that you’re invested in their success, inside Study with Quizlet and memorize flashcards containing terms like Fringe benefits are monetary or nonmonetary compensation given to employees in return for their service to the company. Nov 1, 2024 · For example, if you offer an annual gym membership as a fringe benefit, the facility’s regular price for adult membership represents a good valuation of FMV even if you negotiated lower bulk pricing. If your employer provides a gym membership as part of a wellness program, it could be considered a fringe benefit and may be deductible as a business expense for your employer, but it’s not deductible for you personally. Employee discounts, company cafeteria or meal plans, free parking, and gym or club memberships are among a number of fringe benefits. The value of providing such a facility to employees generally isn’t includable in each participant’s gross income. But most companies are not offering them properly. These perks, like gym memberships and cell phone reimbursements, can help your business attract and retain talented employees by sweetening your overall compensation package. In this comprehensive guide, you’ll learn: Exactly which fringe […] There is no specific tax exemption for wellness program incentives. Mar 26, 2025 · Discover the essential types of fringe benefits employers can offer to attract and retain talent, plus tax implications and strategic implementation tips. Under what condition is an employer-offered gym membership fringe benefit taxable? According to Lexis Tax Advisor, you can make the gym benefit available on an executive-only basis. Fringe benefits are generally considered taxable, unless a specific exemption applies. Life insurance under $50,000: The cost of up to $50,000 of group-term life insurance coverage provided by your employer is generally excludable from income. , Off-site gym membership: This is generally considered a taxable fringe benefit. Under what condition (s) would a gym membership fringe benefit be taxable (select all that apply)? When the on-site gym is open to employees and the general public. I understand that this is a fringe benefit for employees but the only solution that I have found in the forums is to add it to the employees payroll. Fringe benefits you’re legally required to offer include: Workers' compensation Unemployment insurance Family and Medical Leave Act Sep 3, 2025 · What Are Fringe Benefits? Fringe benefits are all the extra perks that go beyond a paycheck. The definition of fringe benefits for this purpose generally applies to services of independent contractors and employees; however, unless otherwise indicated, this guide applies to fringe benefits provided by an employer to an employee. Overview of Taxable vs. Some fringe benefits are statutory—meaning they are mandatory. 00 per year. S. Aug 4, 2024 · For example, if you are allowed to use athletic facilities owned by your employer, the FMV of that fringe benefit would be the amount of money it would cost you to pay for a gym membership in your city that includes the same types of athletic opportunities as you have with your employer. Companies are increasingly recognizing that gym memberships can serve as a valuable fringe benefit, promoting a healthier workforce and demonstrating a commitment to employee welfare. c. Learn how fringe benefits work and check out examples. Most fringe benefits are taxable but some, such as discounts and free memberships, are free. Gym membership are a popular employee benefit, and they give employees the motivation to get up and move. g. How do I set this up in Quickbooks so that it pulls taxes for this fringe benefit but does not increase their pay? Mar 6, 2020 · For that to be true, the gym membership must be considered an "ordinary and necessary" business expense for the employer, and not merely a fringe benefit. Discover how choosing the right business entity structure can unlock small business fringe benefits, including gym memberships and health perks. From accommodation benefits and company vehicles to gym memberships and personal development, we will use our extensive knowledge of local FBT rules to build the right compensation plans for your team members. They must be reported as part of the employee’s gross income. Mar 14, 2017 · I didn’t know this one until recently (when our company offered us gym memberships), but the IRS considers a gym or health membership a fringe benefit, and therefore taxable income. In addition, employees who participate in the wellness program may receive benefits that do not qualify as medical expenses under Section 213 (d), such as gym memberships.