Alongside large benefits, like health plans and 401(k) plans, are smaller benefits, such as mileage reimbursements, holidays, and other perks.
Here are a few benefit areas to consider in 2012.
On July 1, 2011 the IRS raised the optional standard mileage rate for businesses to 55.5 cents. In December, the IRS announced that the rate will stay at 55.5 cents beginning January 1, 2012.
Did you know that your business may reimburse your employees for less than the optional standard mileage rate issued by the IRS?
- If you pay them less, then the employee may be able to deduct the difference on their income tax return.
- If you choose to pay them more, it may become income, and then payroll taxes might come into play.
Since it is a deductible business expense for companies, most companies consider it worthwhile to compensate their employees for the use of their personal vehicles.
The IRS has issued new guidance on employer provided cell phones.
It states that if you provide an employee with a cell phone for business reasons that you don’t compensate your employee for, it is not a taxable benefit to the employee.
In other words, if the employee uses the phone for business, and it hasn’t been given to them to use just for personal purposes, or to increase their morale, it’s not a taxable benefit. The flipside of this is that if you reimburse an employee for using their personal cell phone for business purposes, their reimbursement is also not taxable.
Spousal Coverage on health insurance:
As group health insurance premiums skyrocket, businesses are desperately searching for any ways to get a handle on costs. SHRM (Society of Human Resource Managers) reports that spousal surcharges are increasingly popular as one method of managing premiums.
We can probably all recite examples of working couples that have dual medical coverage through both of their employers. Many of us have also encountered examples of people turning down health care coverage from their own employer in order to access better coverage through their spouse’s employer.
The point of a spousal surcharge is to encourage employees to utilize the medical insurance provided by their own employers, thus helping to contain the costs for their spouses’ employers.
- Here’s how it works: During the enrollment period, employees must state whether their spouses are employed, and if so, whether health insurance is available through their employer. If it is, and they still choose to add their spouse on as a dependent, in addition to the normal premium charged, the company itself adds a surcharge which it keeps.
Spousal surcharges are often not liked by the employees who are affected by them. But the workforce as a whole is beginning to understand that they can be a useful tool to help control one aspect of cost that contributes to the rise in companies’ insurance premiums.
Health insurance benefits reporting:
While we’re on the subject of health insurance, pay attention to the new W-2 reporting requirements for 2012.
- If you file 250 or more W-2s for 2011, in 2012 you will need to start tracking the value of employer-sponsored health coverage and report it on the W-2s you provide in January 2013.
Although these benefits aren’t taxable, the information is to be provided to educate employees about the value of their benefits.
For details, read the IRS interim guidelines (Notice 2012-9) on their website.
Have you taken a look yet at the holiday calendar for 2012? If not, you might want to do that pretty soon and start planning ahead.
- In 2012, both Christmas Eve and New Years Eve fall on a Monday. Will your business close that day? If so, will you give your employees holiday pay for those days as well, increasing their paid holidays by two for 2012?
- Did you know that you can close your business, and you are not required to pay your hourly employees for the day? Your salaried employees, however, must be compensated for the time.
Do you ever wonder what holidays you should provide to your employees? SHRM (Society of Human Resource Management) polled companies and found the most commonly observed holidays in 2012 will be:
- New Year’s Day
- Memorial Day
- Independence Day
- Labor Day
- Thanksgiving Day
- Christmas Day.
96% polled said they would be offering the same number of holidays as they did in 2011.