Employee Deduction Options
Depending on how you would like to set up campaigns, you can opt to have your employees pay for some or all of their portion of the campaign.
If you want to maximize the impact of this benefit, you can pay for the entire thing. This is easy to set up and administer with TIDY, with no deductions handled of any kind. This is the best for employees as well.
- Advantage: Easy to administer and employees really love it.
- Advantage: Can withdraw an employee's credit anytime.
- Disadvantage: Most expensive overall.
Example: Acme Inc. gives each of its employees $150 per month to use towards cleanings, enough to cover cleanings anywhere in the country. If they don't use the benefit, they can withdraw it back to their company account.
If you would like to pay for only some of your employee's cleanings, you have 2 options to do this.
Pay for all eligible employees to get partial credit, without any deductions.
- Advantage: Easy to administer and employees love it.
- Advantage: Can withdraw an employee's credit anytime.
- Disadvantage: Higher admin fees.
Example: Acme Inc. gives each of its employees $40 per month to use towards cleanings. If they don't use the benefit, they can withdraw it back to their company account.
Pay only for employees who accept a deduction on their paycheck.
- Advantage: Lower admin fees
- Disadvantage: Cannot claw back credit (as employees have partially paid for it).
- Disadvantage: Typically less compelling for employees due to deduction
Example: Acme Inc. covers 80% of the cost of cleanings each month for its employees, up to $500/month. John takes advantage of this benefit, having $100 from his paycheck to receive $500 in pre-tax credit.
(Not recommended). If you like, you can opt to allow employees to deduct a certain amount each month from their paycheck to TIDY credit. This is for more limited usecases, for example, those employees who are eligible to deduct home office expenses. The IRS provides some guidance about this here. There may be other usecases of this to support, unrelated to tax treatment, such as employer matching programs. To make this work, the employer would need to set up the deduction on the employee's paycheck, and that employer would still need to transfer the funds to TIDY. However, because the benefit is "paid for" by the employee, this ultimately costs the company less.
- Advantage: Low cost - only the admin fee is paid by the company.
- Advantage: Low cost - only pay for employees who use it.
- Disadvantage: The least compelling of available options for employees.
- Disadvantage: No tax advantages for most people.
Example: John can request to get a $200 credit to clean his workspace in lieu of $200 salary each month.
