KEY POINTS
House Republicans are considering treating work benefits such as employer-provided transportation, free food and on-site gyms as a new source of taxable income to help pay for President Trump’s tax cuts.
These tax proposals are still in the early stages and other aspects of Trump’s tax promises would help workers, such as tax breaks on tips, overtime pay and Social Security benefits.
The concept of taxing employee perks has been debated before in Congress and never made it far, but with the size of the deficit and Trump wanting trillions of dollars in expiring and new tax cuts, some budget pay-fors will need to be found, and this one would dip into workers’ pockets.
in australia, we call this fringe benefits tax and it’s paid by the employer. it tends to lead to employers giving less of these benefits, which was the point: it raises salary by a reasonably comenceate amount so employees receive actual wages rather than benefits that they have no choice over
interesting side effect is that there’s some FBT stuff that doesn’t apply to charities, so you can do a thing called “salary sacrifice” (which is a well known, approved by the govt thing) where you pay some of your pre-tax salary thereby reducing your taxable income, but the charity doesn’t have to pay FBT. it’s a cheap way of providing charities with ways of incentivising their employees to stay
if you’re interested:
https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax
I tried to track down some information for the US, but it seems like the tax code around it is incredibly complicated and it’s been a long time since I had a job where any kind of “gift” was given.
In my somewhat limited experience, American corporations tend to look at employee related expenses holistically, so regardless of who writes the tax check and how the paperwork is shuffled, the expense is considered roughly the same.
Edit: to tie into my original comment, it means that the company has decided what it has budgeted for employees, and any additional taxes would come out of future compensation adjustments and/or reduction in staff instead of showing up as a line item on the paycheck