Benepass offers pre-tax programs to some of the companies we work with (examples include Health Savings Accounts, Dependent Care Flexible Savings Accounts, Commuter accounts, and more). All pre-tax programs are non-taxable which means you'll never pay income taxes on these benefits.
Benepass also offers perks to some of our employers. Perks can be either non-taxable or taxable. For example, some work-from-home programs and cell phone/internet programs are non-taxable, while most other benefits are taxable (wellness programs, mental health programs, fitness programs, food programs, etc.)
If you're not sure if your benefits are taxable, you go to your Accounts page, click/tap on the benefit, and then on "See more benefit details". This will show you if the benefit is taxable or not along with other items.
If you are curious about what items would be taxable/non-taxable, you can refer to your benefit policy: simply navigate to the Accounts page from the app or website, and click or tap into the desired benefit. From there, you'll see a button for "What can I spend my benefit on?" which you can expand to show more details!
How do taxable benefits impact me?
Using some of your Benepass benefits may increase your taxable income if the benefits program itself is taxable. You are only ever taxed on the amount of the benefit you use.
For example, let's imagine your employer has created a $50 / month wellness program through Benepass. If you buy a Peloton subscription for $20, your taxable income will increase by $20. If you spend all $50, your taxable income will increase by $50. And if you don't spend any of your benefit, your taxable income won't increase at all.
Note- if you have a benefits program that is mixed-taxability, for all transactions please make sure to upload a receipt directly to the transaction so that we can confirm the taxability status. The Benepass team will then review and reclassify any eligible expenses for you within 5 business days.
How much tax will I owe?
Any spending in a taxable program is considered additional income (the technical term for this category of income is "imputed income") and is taxed at your ordinary income tax rate.
Where can I review my taxable income on my paystub?
Each payroll system works a little differently so you'll need to check with your payroll or People Ops team where "imputed income" appears on your paystub.
Questions? We are happy to help! Please reach out to Benepass Support for any assistance.