What Is Employee Compensation And Fringe Benefits?

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CHARLOTTE – Employee Compensation – Generally, you must include in gross income everything you receive in payment for personal services. In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits(see below) and stock options.

You should receive a Form W-2, Wage and Tax Statement, from your employer showing the pay you received for your services.

Fringe Benefits

Fringe benefits you receive in connection with the performance of your services are included in your income as compensation unless you pay fair market value for them or they are specifically excluded by law.  Abstaining from the performance of services (for example, under a covenant not to compete) is treated as the performance of services for purposes of these rules.

Recipient of fringe benefit.  You are the recipient of a fringe benefit if you perform the services for which the fringe benefit is provided.  You are considered to be the recipient even if it is given to another person, such as a member of your family.  An example is a car your employer gives to your spouse for services you perform.  The car is considered to have been provided to you and not your spouse.

You do not have to be an employee of the provider to be a recipient of a fringe benefit. If you are a partner, director, or independent contractor, you can also be the recipient of a fringe benefit.

Jen Stevenson Payroll LLC is a proud member of Union County Chamber of Commerce, Waxhaw Business Association, and the American Payroll Association.

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