There are different options available to companies that provide in-home cleaning to their employees as a benefit. The situation changes according to the employees' work situation (remote, hybrid, or in-office), and while TIDY does not provide tax advice, we do share what we learn from our customers below.
Home cleanings offered as a benefit to a company's remote/hybrid workers can be classified as a janitorial expense. Companies can write these off completely in the year the expense is incurred, and do not need to include anything in the employee's paycheck.
On the PnL, this often shows up as cleaning, maintenance, repairs, or similar line items in the statement.
Another option is to offer home cleanings as a benefit, which is taxable to the company or the employee. That is most common for companies with a majority of in-office workers.
The taxable treatment of cleaning as a fringe benefit is outlined in the IRS's "Employer's Tax Guide to Fringe Benefits", found here.
If you are offering cleanings on a pre-tax basis to remote or hybrid workers, you should not have issues. However, TIDY has tools to help ensure compliance so that you can prove to the IRS or other tax agency that these were truly janitorial expenses for their workspace.
These are optional features, but you can:
- Require employees to confirm their home workspace in the app. You can require photos or just text confirmation.
- Require employees to have their pro mark off that workspace as clean when they do the job.
With these features on, you can provide significant proof to the relevant tax agency that this was a business janitorial usecase. Honestly, its more proof than almost any other expense you may provide to them!