Small Business Taxes

Tax Treatment of Fringe Benefits (Health Insurance, Retirement, and More)

Updated 2025-10-28

Which perks are taxable vs. excludable, employer deduction rules, and reporting on pay statements and year‑end forms.

  1. Common benefit types
  2. Taxable vs. excludable
  3. Reporting & payroll handling
  4. Plan design & strategy

Common benefit types

Taxable vs. excludable

Some benefits are excluded from employee income if plan and nondiscrimination rules are met; others must be taxed via payroll.

Reporting & payroll handling

Set up pre‑tax vs. post‑tax deductions correctly; include taxable benefits in wages and withhold/pay applicable payroll taxes.

Plan design & strategy

Choose benefits that fit your hiring goals and budget; consider safe‑harbor retirement plans for simpler administration.