An odd way to reimburse
February 1, 2011 7:48 AM Subscribe
Strange (to me) accounting practice for a work benefit. Is what my company doing legal?
posted by anonymous to Work & Money (18 answers total)
My company offers, as a benefit to me, quarterly reimbursement for my gym membership. But it's odd to me the way it's carried out. I pay for my gym out of pocket, then submit my expenses at the end of the quarter. However, rather than reimburse me directly for the money, the figure is rolled back into my gross income the following month, and subject to the taxation that the rest of my income is.
I suppose, on balance, I still end up with a net benefit. But the double taxation angle just doesn't feel right. I'm not an accountant, so my feelings could be entirely unjustified. I can even understand how there may be some reason to roll it back into the paycheck as benefit, rather than a payout. It just seems weird to be taxed on it again, and not entirely above board.
Is this a normal practice? Or am I right to feel uneasy about it?