Summary
A perquisite is an item of real income that is not paid as cash salary or wages. Perquisites can be classified as either taxable or non-taxable.
If any part of this policy is in conflict with Collected Rules and Regulations (CRR), the provisions of the CRR will govern.
HR Policy Provisions
- Non-Taxable
- To be considered non-taxable, a perquisite must be a requirement or condition of employment, for the convenience of the University, and on the premises of the University.
- An example of a non-taxable perquisite is an employee required to occupy University – owned housing as a condition of employment, for the convenience of the University, and located on the premises of the University.
- Treatment of non-taxable perquisites for the purposes of calculations under any University retirement plan will be determined in accordance with the terms of the applicable plan.
- To be considered non-taxable, a perquisite must be a requirement or condition of employment, for the convenience of the University, and on the premises of the University.
- Taxable
- Taxable perquisites are defined as any non-cash item of real income provided to an employee that is not classified as a non-taxable perquisite.
Examples of taxable perquisites are:
- tickets to athletic, theatrical, or other admission-related events,
- awards; or
- gifts.
- In accordance with University of ÑÇÖÞÓ°Ôº System Policies, Incidental Expenses 26401, except where specifically provided by University policy, neither University assets nor its processes should be used to pay for non-University expenses.
- Taxable perquisites are defined as any non-cash item of real income provided to an employee that is not classified as a non-taxable perquisite.
- Procedure Information
- All perquisites, taxable or non-taxable, are valued at fair market value.
- In the case of athletic, theatrical or other admission-related events, the fair market value is deemed as the face value for admission.
- UM Faculty and Staff Benefits Office, in conjunction with UM Procurement/Supply Chain Operations, will ascertain the fair market value of non-taxable perquisites.
- An Additional Pay Form must be submitted to the HR/Payroll Office.
- Earnings code PRR should be indicated for non-taxable perquisites and earnings code PRQ for taxable perquisites.
- Information about specific earnings codes can be found at Payroll-Campus Payroll Information.
- All perquisites, taxable or non-taxable, are valued at fair market value.
See Also
Finance Policy 22307 - Awards, Gifts & Prizes
Date Created: 9/26/97
Updated: 01/01/2006; 01/21/2006; 02/01/2021
Reviewed 2022-01-28