Effective Date: December 8, 2009
Last Reviewed: December 8, 2009

According to Internal Revenue Service (IRS) regulation, the value of fringe benefits received by an employee from the employer is considered taxable and must be included as compensation on the employee’s paycheck(s) and the W-2. The value of the fringe benefits is added to the following gross pay and increases the amount of applicable tax or contributions.

All taxable fringe benefits are required to be processed through the payroll system. For tax purposes, all taxable fringe benefits must be processed during the calendar year in which they were provided.

The following are considered to be taxable fringe benefits and included on employee paychecks and W-2 as appropriate.

• Life insurance paid by the employer (over IRS limit)

• Personal use of a College-owned vehicle

• Use of College-owned housing (unless required by employer)

• Housing allowances

• Discounts on services (based on fair market value)

• Nonqualified moving expenses

• Health or social club dues

• Personal services (i.e. house cleaning, child care, etc)