What is Imputed Income?
Employee perk spending is considered a form of non-salaried compensation. As a result, most federal tax agencies have specific guidelines about how this compensation should be reported for income tax purposes. This type of taxable perk spending is most commonly referred to as "imputed income."
Imputed Income at Benepass
During onboarding, you will work with your Customer Onboarding Manager to determine the tax status of your benefits. If your benefits program includes taxable benefits, such as a Lifestyle Spending Account or Wellness benefit, any employee spending under that benefit will be reported via the Imputed Income report. This report can then be uploaded to your payroll system or provider to ensure employees are taxed accordingly.
How can I check which of my benefits are taxable or non-taxable?
- From the Admin Dashboard, navigate to the Benefits page and select any active benefit
- Navigate to the Configuration tab and find Taxability
What to know
Frequency
Imputed income should be reported regularly. Benepass recommends reporting these figures monthly, though you may choose whatever cadence works for your team. Less frequent reporting may result in higher single paycheck impacts to the employee, and therefore increased tax withholdings.
Year-to-Date Comparison
Due to the dynamic nature of transaction reclassifications, returns, or refunds, there are a number of reasons an employee's taxable spending may change from period to period. To ensure employees are taxed accurately, we strongly encourage pulling Imputed Income on a rolling YTD basis and reporting the difference.
How to navigate the Imputed income report
On the Imputed income report, you'll be able to:
- Select your date range
- For Imputed income we recommend using the "This year" year-to-date date field.
- Set filters
- Aggregate by employee or country
- By default the report will show [all individual taxable transactions]. To view the total by employee, aggregate by employee.
- Export the report to a .CSV
How to upload Imputed income report to your payroll system
We recommend checking with your specific payroll system to confirm their preferred method. In general however, these will be the steps to follow:
- Export the Imputed income report for your chosen date range.
- If a template has been provided by your payroll provider, input the data from the Imputed income report into that template. The report includes all necessary identifying columns to match to your payroll data such as employee email and employee ID.
- Upload that template (or if allowed, the exported .CSV file) directly to your payroll system.
Questions? We are happy to help! Please reach out to the Benepass Admin Support Team by emailing admin@getbenepass.com.