In This Chapter
• Benefit breaks
• Income busters
• Valuing fringes
• Cafeteria route
Figuring out payroll taxes can make managing the payroll a complicated and time-consuming job, but when you add benefits to the mix, you have a very convoluted pie. This pie can be even more confusing when you add cafeteria benefits plans.
Some benefits are tax-exempt for the employee; others require the employee to pay tax on all or part of the benefit. Some benefit costs are shared by the employer and employee. Sometimes these shared costs reduce the salary before you calculate all taxes; others are exempt only from federal income taxes or state taxes.
This chapter reviews the tax-exempt benefits and the partially exempt ...