Very Minimal Fringe Benefits
A minimal fringe benefit (often referred to as a "de minimis" fringe benefit) is any property or service that you provide to your employees that has such a small value that accounting for it would be unreasonable. These benefits are not taxable to your employees.
If you decide to provide some minimal benefits to employees, be careful not to provide them too often. If you're frequently providing minimal fringe benefits to your employees, the IRS may require that the benefits be included in employees' compensation because, in addition to the actual value of the benefit, the IRS considers frequency a key consideration in determining if a benefit is minimal.
The following are some examples of minimal fringe benefits:
- occasional tickets for entertainment or sporting events
- holiday gifts, (other than cash), with a low fair market value
- coffee, doughnuts, or soft drinks
- occasional parties or picnics for employees and their guests
- occasional meal money or local transportation fare for employees working overtime (not based on hours worked), and for meals provided to enable employees to work overtime
- typing of a personal letter by the business's secretary
- occasional use of a company copying machine
- group term life insurance of $2,000 or less payable on the death of an employee's spouse or dependent
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Warning
Cash is never excludable as a minimal fringe benefit, no matter how small the amount. (The only exception is the occasional meal money or local transportation fare listed above.)
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