When you spend money from certain Benepass benefits, that spending may be treated as taxable income (called "imputed income") and appear on your paycheck.
Why?
The IRS considers most wellness and lifestyle benefits to be a form of non-salary compensation. As a result, it is taxable the same way as your regular income.
Some benefits, such as work from home or other job-related benefits may be considered non-taxable, depending on specific criteria.
Pre-tax benefits, such as HSAs, FSAs, Transit, or Commuter benefits are exempt from payroll taxes as they are funds removed from your income before taxes are assessed.
Tax treatment is determined by IRS rules, not your employer or Benepass.
Common Questions
Which of my benefits are taxable?
You can check the taxable status of any benefit in your account by checking the overview.
- Select the benefit from your Accounts page
- Click "View overview"
- Find your benefit's status under Taxability
How much will I be taxed?
Your tax rate and total tax burden is unique to each person. Many factors, such as total income, exemptions, local tax rates, paycheck deductions, total taxable benefit spending, and more each factor into how your total tax rate and burden are calculated. For questions about your specific paycheck, please reach out to your employer's payroll or finance teams.
What about sales tax?
All spending, regardless of benefit, is subject to local, state, or federal sales tax, as determined by your location and the item or service purchased. Please refer to your local regulations for more information.
Why does the tax amount change each paycheck?
Imputed income varies based on how much you spent from taxable benefits during a given pay period. If your spending changes month to month, you may see those changes in your paychecks. For questions about your specific paycheck, please reach out to your employer's payroll or finance teams.
Do I need to report this on my tax return?
No additional action is needed - your employer handles all required tax reporting through your W-2.