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Layout Agent 2.0 — Thinks before it builds
Thinks before it builds
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TAAB has allowed me and my family to travel to places that we wouldn't have if it wasn't for TAAB, traveling helps us to have more perspective on other cultures and ways of life and can help us grow as people. Im thankful for a perk that actually can help make the world better!
Pros:
as an employee its like free money to travel with, As an employer its a tool to help your employees save and budget for trips with no effort
Cons:
no cons
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Interesting idea!. one question, is the employer contribution part taxable to the employee?
@rsgopi Hey Gopi, great question. The employer contribution is a taxable benefit. Currently, it's considered a fringe benefit per IRS tax code. This is similar to student loan repayment benefits where the employer helps pay down student loan debt. Taab contributions are looked at in the same light.
Employers can decide if they want to help cover any of the tax incurred with a gross-up for example, if desired.
And obviously, we don't like the tax side any more than the next guy, but we want to play by the rules. Long term, our goal is to see favorable tax treatment, but admittedly, that is a long ways off 😉
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@drudalton So how do you handle the tax reporting part?
@rsgopi We leave it up to the employer to decide exactly how they want to handle the tax side. Ultimately, the employer contribution should be imputed pay added to the employees check. As far as when that happens, we've seen it handled two ways.
The first is on a "pay-by-pay" basis. What I mean by that is that the employer match is added to the employees check when the match is made (at the time of each paycheck). For example, lets say you get paid every two weeks and you're putting $50/check into your Taab account and your employer is making a $50 match. In this case, the $50 employer match would be added to each check as imputed pay. In this case, payroll taxes are paid/withheld from both the employer and employee each pay check (pay-by-pay).
The other way the imputed pay has been done is "at time of use". What I mean here is that the employer match is not added to the employees check until the match is actually used/spent. In this case, payroll taxes are deferred. For example, lets say again you're putting $50/check into your Taab account and your employer is making the $50 match. After four checks, you would have put $200 in your Taab (post-tax) as well as your employers $200, for a total balance of $400. In this case, the employer match has not been added to your check yet, thus no taxes have been paid. Lets say you now book a $300 flight. $150 was your contribution which you had paid taxes on already, while the other $150 was your employer match, which you had not paid taxes on yet. In this case, your next paycheck would have $150 of imputed pay added to your check, and thus payroll taxes paid/withheld from both employer and employee. This way is a bit more manually taxing (no pun intended), but does defer taxes until the match is actually given/utilized.
Both routes have their pros and cons and again, ultimately we help the employer decide what they like best for their plan design.
With the "pay as you go" route, since the employee pays payroll taxes on the match with each paycheck, the match becomes the employees money as soon as the match is made.
With the "at time of use" route, the match is actually still the employers money until used, aka until the flight (in above example) is booked by the employee. At that point, the match becomes the employees money (they benefited from it via booking travel) and thus taxes are owed. The pro of this route is the deferral of taxes as well as cleaner "use it or lose it" guidelines for the employer to deploy, if desired.
Sorry for the long, likely confusing, explanation, but we are talking about taxes 😉 Ultimately, we let the employer decide how they're comfortable handling the taxes based on the plan design they see working best for their organization.
*Disclaimer* I am neither an accountant nor lawyer. This advice is general in nature and not to be taken as professional advice. 😉
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Can't seem to find any pricing info. What does this cost the employer?
TAAB has allowed me and my family to travel to places that we wouldn't have if it wasn't for TAAB, traveling helps us to have more perspective on other cultures and ways of life and can help us grow as people. Im thankful for a perk that actually can help make the world better!
Pros:as an employee its like free money to travel with, As an employer its a tool to help your employees save and budget for trips with no effort
Cons:no cons
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