An employee wellness or gym benefit belongs on Line 14, employee benefit programs.
Why line 14
A wellness program you run for employees, including an on-premises fitness facility you operate, is an employee benefit program on line 14. Reimbursing an employee's outside gym membership is also deductible, but it is taxable pay to that employee, so it normally runs through payroll and lands in wages instead. The equipment and build-out for an on-site facility is a capital cost rather than a line 14 expense.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so an employee wellness or gym benefit lands on Line 14 without you sorting it.
Start for freeWhat an employee wellness or gym benefit is confused with
- Line 26, wages
- If the benefit is taxable to the employee, such as cash or a reimbursed outside membership, it is compensation and belongs in wages on line 26.
- Form 4562, form 4562, carried to schedule c line 13
- Treadmills, weights and the build-out of an on-site facility are depreciable property on Form 4562, while the running costs stay on line 14.
- not deductible, not deductible
- Your own gym membership as the owner is personal, with no deduction on any line.
Examples that belong on line 14
- A $1,500 annual flu shot and biometric screening clinic for staff
- An on-premises exercise room for employees with $300 a month of cleaning and maintenance
- A $600 a year wellness stipend run through payroll for each W-2 employee
- Fees for an employee assistance program covering counselling calls
What does not belong here
- Your own gym or fitness subscription, which stays personal even if you work from home
- A facility open to the public or to clients, which is not an employee benefit
- Cash handed over with no payroll treatment, which still has to be reported as wages
The limit that applies
An on-premises athletic facility used substantially by employees is tax-free to them; an off-site membership generally is not, which changes the employee's W-2 but not your deduction.
What to keep
Keep vendor invoices, the list of employees covered, and payroll records for any part treated as taxable pay.
Other expenses on line 14
| Expense | Line |
|---|---|
| an employee educational assistance program | Schedule C, Line 14 |
| dependent care assistance for employees | Schedule C, Line 14 |
| employee health insurance premiums | Schedule C, Line 14 |
| group term life insurance for employees | Schedule C, Line 14 |
| HSA contributions for employees | Schedule C, Line 14 |
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Sources
This page explains how Schedule C lines work. It is general information, not tax advice for your situation. If an expense is large or the answer turns on a fact about your business, confirm it with your tax preparer.
Looking for a different expense? The full Schedule C line lookup has every line from 8 to 27 with the expenses that belong on each, and Schedule C expense categories walks the whole form in order.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so an employee wellness or gym benefit lands on Line 14 without you sorting it.
Start for free