Imputed Income

What is imputed income?

Imputed income is non-salaried benefits that employees receive (like access to a company car or a gym membership) but still get taxed as part of their income.

The employee might not have to pay for those benefits, but they are responsible for paying the tax on the value of them. Imputed income on a company car, for example, would require employees to pay taxes on the amount it would cost to lease that same car.

Many benefits employees receive are generally excluded and tax-exempt, such as health insurance or meals.

benefits-administration-5

Is imputed income the same as fringe benefits?

Some non-cash perks or fringe benefit rewards may be classified as imputed income. As an example, employer-paid health insurance premiums in excess of $50,000 could be classified as imputed income, but small or occasional gifts usually won’t be.

What are examples of imputed income?

Some fringe benefits are taxed depending on the value of the benefit received by the employee. Other benefits are taxed regardless of the monetary amount. Here are some examples of imputed income to keep in mind:

What is excluded from imputed income?

In general, excluded benefits from imputed income are those that are below a certain value threshold or qualify for special treatment, as in the case of health insurance for dependents. Here are some examples:

reporting-analytics-2