Discussion: Hidden Pay? Understanding Imputed Income and Gross-Up Have you ever heard someone say, Its a perk, but I have to pay taxes on it? Employers sometimes offer perks like personal use of a company car, free housing, or life insurance over $50,000. These benefits feel free, but the IRS may still count them as income even if no extra money shows up on your paycheck. On the other hand, when an employer wants to cover your taxes on a bonus or relocation payment, they may gross up the amount so you get the full benefit in your pocket. ? Discussion Prompt: Do you think its fair to tax non-cash perks like gym memberships or use of a company car? Why or why not? Would you rather get a grossed-up bonus or a flat amount and pay the taxes yourself? How might imputed income and gross-up affect how you view your total compensation?
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