There are several benefits to offering free products and services to your staff members. First, everyone loves to get something for free, and your employees are no exception. After undergoing a treatment or bringing home a new skin care product they received as a job perk, they are likely to get excited about it and talk the product or service up to their friends, family members and your prospective patients. They may even post on social media and share it.
Staff members also are inclined to provide you with honest feedback about the experience, allowing you to fine-tune your offerings. Free services help foster staff loyalty and act as a great way to provide advanced training to employees.
While this perk is typically provided for free or at minimal cost to your employees, it does come with a cost to the business. Let’s explore how to make free services for employees a win-win for your staff and your practice’s bottom line.
The Cost of “Free” Services
The Internal Revenue Service (IRS) is likely to consider the products and services you give to your employees as fringe benefits. IRS Publication 15-B (2021), the Employer’s Tax Guide to Fringe Benefits states, “Any fringe benefit you provide is taxable and must be included in the recipient’s pay unless the law specifically excludes it.” There are exclusions for employee discounts, but there are limits on these exclusions. Talk to your tax professional for guidance on the taxable consequences of providing these perks as you develop your program.
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Cheryl Whitman is an author, speaker and national cosmetic marketing professional with more than 35 years in the aesthetic medical spa industry. She is the founder and CEO of Beautiful Forever Consulting where she leads a team of executive-level consultants and business professionals to assist providers in expanding their existing practices and launching new profit centers. Contact Cheryl at [email protected], 561.299.3909.
