Toast Payroll: Record Taxable Fringe Benefits

In this Article:

• Taxable Fringe Benefits Overview
• Record Taxable Fringe Benefits
• Additional Resources

Taxable Fringe Benefits Overview

A taxable fringe benefit is a non-cash benefit an employer gives to an employee that the IRS has determined should be taxed. The benefit must be given a monetary value and added to a payroll. Take a look at this IRS Fringe Benefits Guide for more information.

Examples of fringe benefits include, but are not limited to:

• Gift cards
• Use of a company car
• Gym membership
• Moving expenses

Note: Taxable fringe benefits are an item that you may need to add to payroll as wages to appear on Form W-2s. Group term life insurance premiums and S-Corp owner health premiums are some others. Consult with an attorney or other professional to make sure you are recording all you need to.

Record a Taxable Fringe Benefit

To record a fringe benefit for tax purposes, you will add the earning to a payroll on the . Check out the One Time Earnings section of   for instructions. If you need an earning code created to support these benefits, select the blue chat button in the lower-right corner of any Toast Payroll page and submit  to a Care agent.

Here are some important details to note: 

• The benefit must be recorded on a payroll with cash earnings. This is because the non-cash earning increases the employee’s gross wages and taxable wages, but since there is nothing actually being paid out, just a value being recorded, the employee’s net pay does not increase and Toast Payroll will need to pull the tax withholding from the cash earnings.
• All benefits must be added prior to the last payroll of the year.
• If the earning being recorded is large (ex: $20,000 car allowance), it may be in the employee’s best interest to break it up over a few payrolls to lighten the tax burden.

Additional Resources

• (if you need a new earning in Toast Payroll)

This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for advice.