When it comes to job satisfaction, employee benefits are critical—especially considering today’s incredibly competitive job market. Employers and businesses looking to hire top-notch talent need to increase their employee benefits coverage if they wish to retain the cream of the crop.
Did you know there are a lot of tax-exempt benefits that can be awarded to employees, causing your business productivity and efficiency to flourish?
Employee Benefits – Most Are Exempted From Tax
The most common employee benefit offered by businesses to their employees’ is healthcare and retirement benefits. In fact, these two make up the largest share of employer pay towards benefits.
What is meant by tax exemption?
It refers to exemption to monetary tax payment, which reduces taxable income. A business owner’s tax-exempt status provides complete relief from taxes, reduced tax rates, or tax asked only on certain items.
Additionally, tax exemption status also refers to tax removal from a particular item rather than a tax reduction. There are many benefits employers can offer their employees by providing tax-exempt benefits, such as:
Dependent Care Assistance
Maximum child and dependent-care credit individuals have to pay is $1,050 for care of one person. It’s twice as much for care of two and more children or dependents. This percentage drops according to income received, from 35% to 20% of allowable care costs.
Childcare without assistance is difficult, which is where employers can make a difference. Business owners can help employees with paying dependent care expenses (including children and elderly parents).
Frequent Flyer Miles
Do your employees have to fly a lot due to business work?
You can provide tax-exempt employee benefits when they pay for the ticket out of their own credit card. This would include reimbursed corporate travel from taxable compensation.
How is this benefit attractive?
The bill will remain with the employer (to be paid), but allow the employee to enjoy frequent flyer miles accumulated due to work-related travel.
Transportation Benefits
Commuting expenses i.e. traveling to and from work incurred by employees aren’t tax-deductible. This is why providing employees the benefit of pre-tax transportation is a welcome form of compensation.
Recently, some cities have introduced laws that explicitly require employers to offer this benefit—yet for others this still remains an optional employee benefit.
Providing this benefit will allow employees to enjoy $255 each month as tax excluded income, using it for public transportation, parking and commuter vehicles.
Are you unsure which tax-exempt employee benefits to introduce that will also benefit your business? Talk to Enguard and find out today!