Convenience Of Employer Test

AAA

DEFINITION of 'Convenience Of Employer Test'

The test that is applied to determine whether meals, lodging, transportation or other work-related expenses furnished by an employer for employees are taxable. The convenience of employer test mandates that any employee expenses paid for by the employer must be solely for the convenience of the employer, and must be incurred on the employer's premises if applicable. If this is the case, then those expenses are not included in the employee's income.

INVESTOPEDIA EXPLAINS 'Convenience Of Employer Test'

The convenience of employer test applies both to the taxability of expenses paid by the employer and the deductibility of unreimbursed expenses borne by employees. In the latter case, the bottom line is usually when the employer does not furnish the equipment or tools necessary for the employee to do the job. If the employee is paying these expenses and the expenses pass the convenience of employer test, then they may be deductible subject to certain limitations.

RELATED TERMS
  1. Accountable Plan

    A plan for reimbursing employees for business expenses. Under ...
  2. Convention Expenses

    Any travel expenses incurred while at a business convention. ...
  3. Travel Expenses

    The costs associated with traveling for the purpose of conducting ...
  4. Business

    1. An organization or enterprising entity engaged in commercial, ...
  5. Concurrent Periods

    A period of time in which more than one injury or disability ...
  6. Service Mark

    A brand name or logo that identifies the provider of a service. ...
Related Articles
  1. An Overview Of Itemized Deductions
    Taxes

    An Overview Of Itemized Deductions

  2. Avoid An Audit: 6
    Retirement

    Avoid An Audit: 6 "Red Flags" You Should ...

  3. What are some commonly missed deductions ...
    Entrepreneurship

    What are some commonly missed deductions ...

  4. What are Business Ethics?
    Investing

    What are Business Ethics?

Hot Definitions
  1. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  2. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  3. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  4. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  5. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  6. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
Trading Center