Yes—FarmRaise can accommodate non-cash benefits like housing or meals as part of your payroll setup. These types of compensation are often referred to as non-cash wages, in-kind compensation, or fringe benefits, and they must be handled carefully to comply with IRS tax regulations.
What Are Non-Cash Benefits?
Non-cash benefits are forms of employee compensation that aren’t paid in cash. For farm workers, this might include:
On-farm housing
Meals provided during work
Utility payments or fuel
Use of vehicles or equipment
Farm produce or livestock
How Do These Affect Payroll and Taxes?
While FarmRaise Payroll can include these forms of compensation in your system, they have specific tax treatment rules, and they may or may not be subject to employment taxes. It all depends on how the benefit is structured and whether it meets IRS criteria for exemption.
Common Examples:
Benefit | Taxable? | Notes |
On-farm housing | Often not taxable | Must be provided for the convenience of the employer, on the farm premises, and as a condition of employment. |
Meals | Often not taxable | Must be provided on the farm and for the employer’s convenience. |
Utilities | Taxable or not, depending on use | Generally considered taxable unless required for on-site housing. |
Farm produce | Usually taxable | Fair market value may need to be included in wages. |
Why Agricultural Workers Might Be Exempt
Agricultural workers may qualify for exemptions from certain federal tax obligations when it comes to housing and meals, especially if:
The benefit is furnished on the business premises.
It’s for the employer’s convenience, and
Acceptance of the benefit is a condition of employment.
These exemptions are codified under IRS Section 119 and are meant to support the unique needs of agricultural labor.
What You Should Do
While FarmRaise Payroll supports entering these benefits into the system, you’ll want to work closely with your accountant or tax professional to get it right. Here's how to proceed:
Discuss with Employees
Make sure workers understand what is being offered, whether it counts as taxable income, and how it might affect their take-home pay or eligibility for public benefits.
Consult a Tax Professional
Every farm and situation is different. A tax expert can help structure your compensation plan to minimize your liability and protect your employees from unexpected taxes.
Keep Detailed Records
Maintain records on the fair market value of any non-cash benefits and under what conditions they were provided.
How FarmRaise Can Help
When you set up your payroll with FarmRaise, just let us know during onboarding or updates if you:
Provide on-site housing
Offer meals or groceries
Include any other non-cash perks
We’ll ensure your payroll records are accurate and ready to support compliance with federal and state regulations. You stay focused on your operation—we’ll help handle the bookkeeping.
Need help setting this up? Contact our support team—we’re here to help!