Define: Perquisite

A perquisite, commonly referred to as a “perk,” is a benefit or advantage that is provided to an employee in addition to their regular salary or wages. It can include things like company cars, housing allowances, or stock options.

Yes, perquisites are generally considered taxable income and must be reported on an employee’s tax return. The value of the perquisite is typically included in the employee’s gross income for tax purposes.

Yes, employers have the discretion to decide whether or not to offer perquisites to their employees. However, if perquisites are provided to some employees but not others, it could potentially raise issues of discrimination or favoritism.

Yes, employees can negotiate for specific perquisites as part of their overall compensation package. It is common for high-level executives or individuals with specialized skills to negotiate for additional perks such as a company car or a generous housing allowance.

In general, an employer can change or revoke perquisites as long as they provide reasonable notice to the affected employees. However, if the perquisite is considered a contractual right or is specifically outlined in an employment agreement, the employer may need to obtain the employee’s consent or provide compensation in lieu of the perquisite.

Yes, there are legal limitations on perquisites, particularly in relation to executive compensation. Publicly traded companies, for example, must comply with regulations set by the Securities and Exchange Commission (SEC) regarding the disclosure and approval of executive perquisites.

Yes, in some cases, an employer may require an employee to contribute towards the cost of a perquisite. For example, an employee who is provided with a company car may be required to pay for the personal use of the vehicle or cover the cost of insurance.

Yes, if an employer provides a perquisite to an employee, regardless of whether the employee requested it or not, the value of the perquisite is generally considered taxable income.

Yes, if an employee is found to be abusing or misusing perquisites provided by the employer, it can be grounds for disciplinary action, including termination. Employers have the right to enforce policies and guidelines regarding the appropriate use of perquisites.

In general, employees cannot deduct the cost of perquisites on their personal tax returns. However, there may be certain exceptions or specific circumstances where a deduction may be allowed. It is advisable to consult with a tax professional for guidance on individual tax situations.