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Do You Offer Housing, Meals, or Non-Cash Benefits as Part of Wages?

Housing, meals, non-cash benefits for employees, lodging for employees, housing for farm employees

Isabelle Talkington avatar
Written by Isabelle Talkington
Updated over 2 months ago

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:

  1. 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.

  2. 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.

  3. 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!

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