Other Fringe Benefits

De Minimis Fringe Benefits

A de minimis (minimal) fringe benefit is a benefit that has a value so small that accounting for it is impractical. For example, a common de minimis fringe benefit is a company cafeteria located on or near the employer’s business premises, where the cost of the meals paid by employees covers the direct cost of running the cafeteria. Executive dining rooms do not qualify, since the de minimis fringe benefit of employer-provided eating facilities may not be provided on a discriminatory basis to highly compensated employees.

De Minimis (Minimal) Benefits

You can exclude the value of a de minimis benefit you provide to an employee from the employee's wages. A de minimis benefit is any property or service you provide to an employee that has so little value (taking into account how frequently you provide similar benefits to your employees) that accounting for it would be unreasonable or administratively impracticable. Cash and cash equivalent fringe benefits (for example, use of gift card, charge card, or credit card), no matter how little, are never excludable as a de minimis benefit, except for occasional meal money or transportation fare.

Examples of de minimis benefits include the following:

• Occasional personal use of a company copying machine if you sufficiently control its use so that at least 85% of its use is for business purposes.
• Holiday gifts, other than cash, with a low fair market value.
• Certain group-term life insurance policies (see below).
• Meals. See Meals, later.
• Occasional parties or picnics for employees and their guests.
• Occasional tickets for entertainment or sporting events.
• Transportation fare...