How should the amount of a fringe benefit subject to taxes be calculated?
The amount that is included in the employee s income and subject to taxes is the total amount minus the amount excluded by law and any amount paid by the recipient for the benefit. For example, if an employee receives a fringe benefit that in one year was the equivalent of $600 for which the Internal Revenue Service (IRS) allows the employee to exclude $500 as nontaxable and the employee has already paid $50 of the benefit, the taxable amount would be $50.
