Originally Posted by
Not So Casual Observer
You are correct when you say that the seating requirement is a form of compensation- just like pay and benefits. It was negotiated and with all negotiations, something was paid for that provision while negotiating. The idea behind the rule is that the pilot needs to be in the most rested state possible to safely fly when (s)he arrives at their destination.
Again, many thanks.
So if this is a benefit and part of compensation, then what is the tax implication? When I get miles as part of a bank account I get taxed for it. When I get it as a part of travelling it's a form of a rebate so there is no tax. When an employee gets this benefit, particularly when it is an upgrade that is provided without earning it (ie no form of rebate as it would be when it redeemed as part of customer loyalty) then how are employees taxed for that benefit?
It seems to me that everytime I meet a pilots wife in international first, and they tell me they travel a lot but never pays for it followed by my husband is up front and got me this seat -I always wonder shouldn't they full tax in this benefit? A 36% tax on a $6,000 benefit suggest that they should owe about 2k. I have friends who are pilots who tell me they don't pay any tax on negotiated benefits. Why is that? I have also travel benefits as part of my compensation. I pay full tax on that benefit.