Imputed Income

Imputed income refers to the estimated value of benefits that are given to employees, contractors, or other workers in the form of non-cash benefits. It includes benefits that employees receive that aren’t a part of their salary or wages but are still taxed as a part of their income. These are often referred to as "fringe benefits." Business owners should understand imputed income and properly track employee benefits to ensure that they are reporting taxable income accurately.

What are some examples of imputed income?

Imputed income refers to the value of benefits or services provided to an employee that are not included as part of their salary or wages yet are still subject to taxation as part of their overall income. Examples of imputed income include:

• Gym memberships

• Adoption assistance over the yearly federal adoption tax credit

• Tuition assistance at the graduate level

• Moving expense reimbursements for non-U.S. employees

• Company cars

• Company trips

• Tickets for sporting and other types of events

Which benefits are not considered imputed income?

The benefits that are not examples of imputed income are those that are part of an employee's salary or wages and are subject to payroll taxes. Examples of such benefits include:

• Regular salary

• Overtime pay

• Bonuses

• Commissions

• HSAs or FSAs

• Dependant health insurance

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