What are wages under Code 3401 A?

Named for the Section of the Code that defines “wages” for certain purposes, Code Section 3401(a) wages are defined as compensation that is subject to federal income tax withholding at the source of the compensation.

Are fringe benefits considered wages for 401k?

Examples. A safe harbor 401(k) plan defines compensation as Form W-2 wages (that is, the amount shown in an employee’s W-2, Box 1, Wages, tips, other compensation), less reimbursements, fringe benefits, moving expenses, and welfare benefits.

What is the difference between W-2 wages and 3401 a wages?

W-2 compensation is almost identical to 3401(a) wages. The main difference is that W-2 wages include income from excess group term life insurance. This is defined as the taxable portion of the premiums for group term life insurance greater than $50,000.

What is excluded compensation?

Excluded Compensation means such Compensation as the Employer in its Adoption Agreement elects to exclude for purposes of this Section 1.11.

Is PTO considered a fringe benefit?

In the vast majority of cases, fringe benefits like paid time off (PTO), compensation for unused, accrued vacation or sick days, and other benefits are not required. Rather, the employer provides these benefits to employees by choice.

What is not included in fringe benefits?

Some of the non-taxable fringe benefits that are excluded from gross income include: Employee discounts. Employee stock options. Group-term life insurance.

What is eligible compensation?

Eligible Compensation means all regular cash compensation including overtime, cash bonuses and commissions. Regular cash compensation does not include severance pay, hiring and relocation bonuses, pay in lieu of vacations, sick leave or any other special payments.

What are two examples of fringe benefits?

Some of the most common examples of fringe benefits are health insurance, workers’ compensation, retirement plans, and family and medical leave. Less common fringe benefits might include paid vacation, meal subsidization, commuter benefits, and more.

When Should withholding tax be paid?

How do I pay Withholding Tax? Any amount withheld, should be remitted to KRA on or before the 20th day of the following month.