Fringe Benefits

How Do I...

Many companies provide employment benefits to their employees. These benefits, known as fringe benefits, are a form of payment made to employees for services provided. Examples of fringe benefits include the following:

• car allowances
• use of a car
• free airplane flights
• discounts on property or services
• country club memberships
• sporting event tickets

Usually, the value of fringe benefits is included in an employee’s gross income. You can easily tailor Sage 50’s payroll setup to handle your employee fringe benefit needs.

For example, the value of an employee’s use of a car provided by an employer must be included in the employee’s gross income. The value of the personal use of the car is subject to federal and other taxes.

Before you close your payroll tax year, you must set up the personal use of the car as a fringe benefit in Sage 50, and enter the value of the use of the car as income so that your W-2s and other year-end reports are correct.

Setting up fringe benefits involves the following steps:

1. Establish the fringe benefit as default information.
2. Include the fringe benefit amount in the adjusted gross for tax calculations.
3. Assign the fringe benefit field for W-2s and other forms.
4. Include the fringe benefit amount in payroll entry.

What do you want to do next?

• Set up fringe benefits
• Set up common payroll deductions
• Perform other payroll tasks
• Read the employee setup overview
• Read the employee defaults overview

Published: March 21, 2017
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