Meaning & use
taxable benefit
Last updated
Meanings
nouncountablefinance
A non-cash extra from an employer, such as a company car, that counts as income and may be taxed.
Grammar: Often appears as a taxable benefit in kind: the car is a taxable benefit.
Patterns
- a taxable benefit from something
- declare a taxable benefit
A company car is usually a taxable benefit, so it affects your tax bill.
Employees must report any taxable benefit on their annual return.
Free private health insurance can count as a taxable benefit.
nouncountablefinance
A payment from a government or other scheme that must be counted as income when working out tax.
Grammar: Often contrasts with a non-taxable benefit: some pension payments are a taxable benefit.
Patterns
- a taxable benefit under something
Some unemployment payments are a taxable benefit in certain countries.
The accountant explained which of her payments were a taxable benefit.
He was surprised to find that his retirement top-up was a taxable benefit.
Word forms
| plural | taxable benefits |
|---|
Common combinations
- declare a taxable benefit
- You must declare a taxable benefit on your tax form.
- value of the taxable benefit
- The value of the taxable benefit depends on the car's price.
- treated as a taxable benefit
- Free housing is often treated as a taxable benefit.
- report a taxable benefit
- The employer must report each taxable benefit to the tax office.
- receive a taxable benefit
- Staff who receive a taxable benefit pay tax on its cash value.
Synonyms and how they differ
- benefit in kind
- Benefit in kind is the standard British term for a non-cash perk and sounds more technical than taxable benefit.
- fringe benefit
- Fringe benefit means any extra from a job, whether or not it is taxed, while taxable benefit means the tax rules apply.
- perk
- Perk is informal and says nothing about tax.
- non-cash compensation
- Non-cash compensation is a formal, general phrase that does not necessarily mention tax.
Opposites
Word family
Commonly confused: taxable benefit or taxable income? taxable benefit or tax credit?
taxable benefit vs taxable income
Taxable income is the total amount on which tax is calculated. A taxable benefit is one item that may be added to it.
taxable benefit vs tax credit
A tax credit reduces tax owed. A taxable benefit increases the income that is taxed.
Practice
Your employer gives you a company car for private use. For tax purposes it is probably a ___.
Choose one answer.
A company car used privately is a non-cash perk counted as income, so it is a taxable benefit. A tax credit reduces tax and is the tempting wrong answer.
Make it your own
Write a sentence using “taxable benefit”, then check it and compare it with the examples above.