What keeps employees happy, engaged, and loyal? Salary, paid time off, health insurance, and retirement benefits are vital parts of the equation, but many employers also give their employees perks — otherwise known as fringe benefits.
Many employers and employees think of fringe benefits as freebies that don’t impact the employee’s taxable income. But that’s not always the case.
Employers don’t have to include some fringe benefits in the employee’s wages, but others they do. Leaving them out of the employee’s wages — and therefore avoiding federal income tax and payroll taxes — can be a costly error to make.
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