De minimis benefits explained.

The rule in the publication

Publication 15-B says you can exclude the value of a de minimis benefit you provide to an employee from the employee’s wages. It defines a de minimis benefit as any property or service that has so little value, “taking into account how frequently you provide similar benefits to your employees,” that accounting for it would be unreasonable or administratively impracticable. Two things follow. First, the test looks at the benefit and the pattern together: a doughnut on a Friday is different from a weekly catered lunch. Second, there is no dollar threshold to check against. A $40 item can qualify as an occasional gift while a $15 item given every week may not.

The publication adds one hard line: cash and cash equivalent fringe benefits, such as gift certificates, gift cards, and the use of a charge card or credit card, are never excludable as a de minimis benefit, no matter how little they are worth. The only cash-like exceptions it names are meal money and local transportation fare provided on an occasional basis because of overtime work.

For this exclusion the publication treats any recipient of a de minimis benefit as an employee. That matters for independent contractors and other non-employees who receive the same small perks.

Examples the publication lists as de minimis

• Personal use of an employer-provided cell phone provided primarily for noncompensatory business purposes.
• Occasional personal use of a company copying machine, if you control its use so that at least 85% of its use is for business purposes.
• Holiday or birthday gifts, other than cash, with a low fair market value (FMV), and flowers, fruit or similar items provided under special circumstances such as illness, a family crisis or outstanding performance.
• Group-term life insurance payable on the death of an employee’s spouse or dependent, if the face amount is not more than $2,000.
• Certain meals, such as coffee, doughnuts and soft drinks, occasional meals or meal money for overtime, and occasional parties or picnics for employees and their guests.
• Occasional tickets for theater or sporting events.
• Certain transportation fare, including occasional local fare for overtime work.

Examples the publication says are not de minimis

The publication lists benefits that fail the test: season tickets to sporting or theatrical events; the commuting use of an employer-provided automobile or other vehicle more than one day a month; membership in a private country club or athletic facility, regardless of how often the employee uses it; and use of employer-owned or employer-leased facilities such as an apartment, hunting lodge or boat for a weekend. When a benefit does not qualify, for example because the frequency exceeds the limit described for it, the publication says that generally the entire benefit must be included in income, not just the part above some threshold.

The specific dollar and percentage figures

Because the general rule has no cap, the figures that do appear in Publication 15-B (2026) are worth knowing exactly.

• $21 per month for public transit: a discount on transit passes, tokens or farecards, or vouchers exchangeable solely for them, qualifies as de minimis if the discount or the vouchers in any month do not exceed $21. A reimbursement of commuting cost on a public transit system follows the same $21 monthly ceiling. Separately, the 2026 monthly exclusion for qualified transit and commuter highway vehicle benefits is $340, which is a different rule covered in the publication’s Qualified Transportation Benefits discussion.
• $2,000 face amount for group-term life insurance on a spouse or dependent.
• 85% business use for occasional personal copier use.

Local transportation fare given on a regular or routine basis does not qualify, and the occasional overtime fare must be reasonable and not based on hours worked. The same hours-worked point applies to meal money: the publication says the meal exclusion does not apply to meal money figured on hours worked, for example $2.00 for each hour over 8 hours, or to meals or meal money provided on a regular or routine basis.

Employer-operated eating facilities and meals

De minimis meals also include meals at an employer-operated eating facility for employees when the annual revenue from the facility equals or exceeds its direct operating costs. The facility must be owned or leased and operated by you (a contract operator counts), be on or near your business premises, and serve meals during, or immediately before or after, the employee’s workday. For a highly compensated employee, the exclusion fails if the meal is not available on the same terms to all employees or to a reasonable classification that does not favor highly compensated employees. For 2026, a highly compensated employee is one who was a 5% owner at any time during the year or the preceding year, or who received more than $160,000 in pay for the preceding year (you can ignore the pay test if the employee was not also in the top 20% by pay).

The publication also notes a deduction change that affects your books but not the exclusion. The temporary 50% deduction for de minimis meals covered tax years 2018 through 2025. For amounts incurred or paid after 2025, you can no longer deduct expenses for food and beverages provided through an eating facility that meets the de minimis or convenience-of-employer requirements, subject to limited exceptions created by P.L. 119-21 (see section 274(o)). Expenses for employee recreation such as holiday parties and annual picnics remain 100% deductible when made primarily for the benefit of employees other than officers, shareholders or other owners with a 10% or greater interest, or other highly compensated employees. The exclusion rules still apply even where the deduction is limited.

Cell phones and the working-condition link

The publication ties two exclusions together for phones. The business use of an employer-provided cell phone given primarily for noncompensatory business reasons is a working condition fringe benefit, and personal use of that same phone is a de minimis fringe benefit. Substantial business reasons include needing to reach the employee at all times for work emergencies, requiring availability to speak with clients away from the office, and speaking with clients in other time zones outside the normal workday. A phone given to promote goodwill, attract a prospective employee, or as extra compensation does not qualify. See the working condition fringe page for the other half.

Employment tax and reporting

Table 2-1 of the publication shows de minimis benefits as exempt from federal income tax withholding, from social security and Medicare tax, and from federal unemployment (FUTA) tax. Because an excluded benefit is not wages, it is not reported on Form W-2. A benefit that fails the test is a taxable fringe benefit: its value, reduced by anything the employee paid, is included in wages and reported in boxes 1, 3 and 5. The publication’s rules for valuing and reporting taxable benefits are in its sections 3 and 4, and the actual value of benefits provided in a calendar year must be determined by January 31 of the following year.

Applying the test: an illustration

This illustration applies the publication’s rule and is not an IRS example. A shop provides coffee every day, a birthday cake once a year per employee, and a $25 gift card at the holidays. Under Publication 15-B, the coffee and the occasional cake fit the listed examples. The gift card does not qualify at any amount because it is a cash equivalent, so its $25 value is included in wages, subject to withholding and employment taxes. If the same shop began giving each employee a free meal every day, the regular, routine pattern would take it out of the de minimis meals exclusion, and the owner would need to look at whether the meals qualify as meals furnished on the business premises for the employer’s convenience instead (see the free meals page).

Pub 15-B fringe benefits at a glance

Other pages in this set

Achievement Awards, Educational Assistance ($5,250), Dependent Care Assistance, Adoption Assistance, Meals on Business Premises, No-Additional-Cost Services, Cents-per-Mile Valuation Rule, Cafeteria Plan, Working Condition Fringe, Lodging on Business Premises.

Sources

• IRS Publication 15-B (2026), Employer’s Tax Guide to Fringe Benefits: section 2, De Minimis (Minimal) Benefits; Table 2-1; section 4 reporting. Page last reviewed April 30, 2026. Read November 2, 2026.

Every dollar figure on this page is a 2026 figure from the publication unless a different year is stated. The IRS can change a publication at any time, and the publication, your plan documents and a payroll professional control over this page. This page restates the publication and does not extend it to facts it does not address.