Taxability

How do Benepass programs affect my taxes?

Benepass offers pre-tax programs to some of the companies we work with (examples include Health Savings Accounts, Dependent Care Flexible Savings Accounts, Commuter accounts, and more). All pre-tax programs are non-taxable which means you'll never pay income taxes on these benefits.

Benepass also offers perks to some of our employers. Perks can be either non-taxable or taxable. For example, some work from home programs and cell phone/internet programs are non-taxable, while most other benefits are taxable (wellness programs, mental health programs, fitness programs, food programs, etc.)

If you're not sure if your benefits are taxable, you can always reach out to us to confirm by clicking "Submit a request" in the top right corner of this page. If you've already spent under the benefit, you can also click on any transaction to see whether it was considered taxable – look for the section called "Taxability".

How do taxable benefits impact me?

Using some of your Benepass benefits may increase your taxable income if the benefit program itself is taxable. You are only ever taxed on the amount of the benefit you use.

For example, let's imagine your employer has created a $50 / month wellness program through Benepass. If you buy a Peloton subscription for $20, your taxable income will increase by $20. If you spend all $50, your taxable income will increase by $50. And if you don't spend any of your benefit, your taxable income won't increase at all.

How much tax will I owe?

Any spending in a taxable program is considered additional income (the technical term for this category of income is "imputed income") and is taxed at your ordinary income tax rate.

Where can I review my taxable income on my paystub?

Each payroll system works a little differently so you'll need to check with your payroll or People Ops team where "imputed income" appears on your paystub.

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