Imputed payments, also known as fringe benefits, are perks an employer gives employees on top of salary. This non-cash compensation should be taxed as income on the W2.
Emburse Spend is great for paying out these types of expenses! However, you will need to also record the imputed pay deductions in your payroll.
Types of fringe benefits
According to the IRS, imputed pay can typically include:
- Moving expense reimbursements
- Gym memberships and fitness incentives
- Personal use of a company car
- Educational assistance and tuition reduction
- Employee discounts
- Employer-provided cell phones
If you're unsure if you need to enter imputed pay, we suggest you speak with an accountant to find the correct classification for your situation. Imputed pay is added to an employee's gross wages for taxability purposes only. It will not be included in the employee's net pay since this benefit was already compensated via Emburse Spend.
Using Emburse Spend to manage fringe benefits
You can treat fringe benefits in Emburse Spend as regular expenses. However, you will need to record these as imputed pay in your payroll for tax purposes. For example, here's how to record imputed pay in Gusto. Emburse Spend will be making the payment directly to your employees, but you'll be recording this in your payroll accordingly.
Use our filters and reporting features to help you collate expenses you need to record in your payroll as imputed pay.