What is Imputed Income?

Employee perk spending is considered a form of non-salaried compensation provided by employer to employee. This means that most federal tax agencies have specific guidelines about how spending under perk programs should be reported for income tax purposes. The reporting of taxable perk spending is most commonly known as "imputed income" reporting.

Imputed Income at Benepass

Your Benepass perk programs have a specific taxability designation which was decided upon during the implementation of your benefits program. In most cases, employers choose to follow federal guidelines, therefore, certain perk spending will be deemed "taxable", while other purchases are "non-taxable".

For most programs, this happens at the perk level. For example, all spending under a Wellness benefit program will default to taxable, while all spending under a Professional Development benefit might default to non-taxable. These decisions are made at the time of program design and implementation.

When employees complete transactions or submit reimbursements, each type of spending will have this taxability status associated with it. This allows us to generate reports for you to track taxable spending for an employee, and report it as imputed income on their paystub.

How can I check which of my perks are taxable/non-taxable?

1. Go to the Admin Dashboard
   
   
2. Click on Benefits on the left-hand side menu and select the benefit you want to view
   
   
   
3. Click on the Rules tab and scroll down to Taxability
   

Reporting Best Practices

Cadence

We recommend reporting imputed income on a monthly or quarterly basis. You can elect to do this more, or less frequently, but will want to consider the paycheck impact in either direction (e.g. quarterly reporting will likely result in higher imputed income reported on a single paycheck, which can result in significantly increased tax withholdings)

Year-to-Date Comparison

Due to the dynamic nature of some transactions, regular auditing, returns or refunds, and more, there are a number of reasons an employee's taxable spending might fluctuate over the course of the year. We strongly encourage pulling data YTD.

How to Pull Imputed Income Totals on Benepass Admin Dashboard

Aggregated

1. Head to the Reports Page, which defaults to the "Posted Spending" view.

2. Select your date range - in the case of Imputed Income we will want to set this to YTD (Jan 1 to present)

3. In the Report Preset dropdown, select Imputed Income (total)

4. You can then export this as a CSV.

Breakdown by Transaction/Expense

While the aggregated Imputed Income (total) report will show you the sums by employee in a given time period, the Imputed Income (breakdown) report will show you line by line each transaction or expense that's included in the total sum.

1. Head to the Reports Page, which defaults to the "Spending" view.

2. Select your date range - in the case of Imputed Income we will want to set this to YTD (Jan 1 to present)

3. In the Report Preset dropdown, you will have the option to generate the Imputed Income (breakdown)

4. You can then export this as a CSV.

Note on Comparing Imputed Income and Spending Reports

While most imputed income reporting will reflect the prior month's spending, it's possible that other transactions may be included in these calculations. For example, pulling imputed income totals for September and comparing it to all September spending might lead to some initially confusing discrepancies.

Because we encourage you to pull Imputed Income reports in a YTD manner, transactions from outside of the reporting month may be included here. This can be for a few reasons:

• Reimbursements submitted the prior month that weren't approved until after EOM (e.g. a reimbursement submitted 8/31 that is approved 9/1)
• The taxability of a prior month's transaction has been updated

For this reason, we encourage you to use the "Breakdown" function as described above to see which transactions are being considered in the current report.

How to Upload Imputed Income for Payroll

You are able to use your Benepass imputed income report to upload the correct imputed income for your employees into your payroll system in 4 easy steps. 

1. Export the report you would like to upload as a CSV. 
2. Copy and paste the data from the Benepass report into the upload template provided by your payroll provider. Your Benepass report includes the necessary identifying columns to match to your payroll data such as employee email and ID, as well as each employee’s earnings amount.
3. Log into your payroll provider system.
4. Upload the CSV to your account. 

Questions? We are happy to help! Please reach out to the Benepass Admin Support Team by emailing admin@getbenepass.com.