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Balancing benefit discounts
Q. I'm concerned about my hospital's liberal employee discount benefit. Are there any guidelines I can offer the owner to keep him and the rest of the team safe from tax liability?
Q. I'm concerned about my hospital's liberal employee discount benefit. Are there any guidelines I can offer the owner to keep him and the rest of the team safe from tax liability?
Gary Glassman
The IRS has guidelines for employee discounts, says Veterinary Economics Editorial Advisory Board member Gary I. Glassman, CPA, a partner with Burzenski and Co. PC in East Haven, Conn. To keep your team safe from the wrath of the IRS, consider:
- products at cost, plus 10 percent
- services at 20 percent off
- no maximum number of pets
- free boarding, but only when you have excess capacity.
Glassman also says employee pet insurance is a good alternative as long as you limit the number of pets covered because of cost. "Compare various plans to be sure you're getting the best deal," he says.
If you pay for employee pet insurance, the cost can't be offered as a tax-free benefit; the premium cost counts as additional compensation so you must include the premium in team members' wages. The IRS code section for employee benefits issues is 132, and Glassman recommends following up with your accountant if you have further questions.
