USA Commuter Benefits Accounting

[ChuckDowd]

My company pays each employee $105 per month to take the public transportation or $85 per month for parking. We record this as a liability and then reduce the liability when the money is given to the employee. Is it required to record a company benefit as a liability or can it be expensed when the payments are made?

 

[ladyrider]

It's not a liability because you never know how many employees you are going to have at any given time - that number could change. So just expense it but if you use a 3rd party payroll provider be sure and report whatever is paid as income to the employee. If you do in house payroll add it to that as employee welfare. I had a client who paid 100 a week for gas allowances to an employee and I reported it to Paychex to be added to his W2 and all applicable taxes withheld and paid.

 

[shannons864]

It's not a liability because you never know how many employees you are going to have at any given time - that number could change. So just expense it but if you use a 3rd party payroll provider be sure and report whatever is paid as income to the employee. If you do in house payroll add it to that as employee welfare. I had a client who paid 100 a week for gas allowances to an employee and I reported it to Paychex to be added to his W2 and all applicable taxes withheld and paid.

so if the company decided to do fuel cards, does that fuel have to be reported to the employee?

-864

 

[bklynboy]

It's not a liability because you never know how many employees you are going to have at any given time - that number could change. So just expense it but if you use a 3rd party payroll provider be sure and report whatever is paid as income to the employee. If you do in house payroll add it to that as employee welfare. I had a client who paid 100 a week for gas allowances to an employee and I reported it to Paychex to be added to his W2 and all applicable taxes withheld and paid.

Not sure I agree. If its probable and estimatable then you should accrue the liability at your best estimate and true up or down as you get better information (especially if you have historical data that can show people regularly use this benefit). However, if not material then expensing as you go is fine as well since timing of accrual and payment is likely not a big lag.