In many countries, private healthcare insurance is classed as a taxable benefit. Other benefits can include items such as gifts, retirement plans, or life insurance. While these benefits can be a great perk for workers, they are often subject to taxation either through payroll, or through a self assessment.
What are Taxable Benefits?
Taxable benefits are any benefits that a worker receives from their employer that are subject to taxation. This means that the employee must pay taxes on the value of these benefits, just as they would on their salary. In many instances, this will include items such as private healthcare insurance.
Why are Benefits Taxable?
You may be wondering why benefits are subject to taxation in the first place. The reason is that these benefits are considered a form of compensation. Just like a salary, they are a form of income and therefore subject to tax as a 'benefit in kind'.
Therefore, your end employer may offer to provide you with a medical insurance policy through Mauve, but you may be subject to taxation on part or all of the amount that is considered as a benefit.
How are Benefits Taxed?
The way benefits are taxed can vary depending on the country and the specific benefit. In some cases, Mauve may be responsible for withholding taxes from the payroll which would therefore reduce the net pay that you receive. In other cases, you may be required to report the value of the benefits provided on a tax return.
If you are unsure of how benefits are treated in your country of employment then you can reach out to the client services team who will advise on the effects that benefits such as private healthcare insurance will have on your pay.