Employee Benefits

Which Employee Benefits Survived Recent Tax Legislation and Which Disappeared Forever?

Earmark Team · February 5, 2026 ·

Picture an HVAC technician standing in a Florida hardware store, personal credit card in hand, about to purchase a part needed to complete an air conditioning repair. It’s a routine moment that plays out thousands of times daily across the country: an employee spending personal funds on a legitimate business expense. But what happens next determines whether that simple transaction remains a straightforward reimbursement or transforms into unexpected taxable income.

This scenario is part of the final installment of the Tax in Action podcast’s three-part series on fringe benefits. In this episode, host Jeremy Wells, EA, CPA, completes his comprehensive discussion of IRC Section 132 benefits by looking at the remaining four fringe benefit categories and tackling the often-misunderstood topic of accountable plans.

The timing couldn’t be better. The Tax Cuts and Jobs Act of 2017 initially suspended many traditional benefits through 2025. Now, the One Big Beautiful Bill Act has made those restrictions permanent. And ir’s crucial for tax practitioners to understand these changes.

The Legislative Wrecking Ball: What’s Gone and What Remains

Before advising clients on fringe benefits, practitioners need a clear picture of what recent legislation has taken off the table permanently.

No Qualified Transportation Benefits Deductions for Employers

The qualified transportation fringe once covered four benefit categories:

Transportation in a commuter highway vehicle
Transit passes
Qualified parking
Qualified bicycle commuting reimbursement

For employers in major cities, these benefits were a meaningful way to help employees manage commuting costs.

That’s all changed now.

The Tax Cuts and Jobs Act disallowed the employer deduction for these benefits from 2018 through 2025, with one narrow exception: employers could still deduct transportation costs provided to ensure employee safety. As Jeremy explains, this means “vehicles that need additional security, such as bulletproof glass or a driver, a chauffeur that is trained in defensive driving techniques”—not typical small business scenarios.

The One Big Beautiful Bill Act made this disallowance permanent under IRC Section 274(a)(4).

But there’s a crucial nuance: the employee exclusion still exists for most of these benefits. Employees can still receive transit passes or qualified parking tax-free, within the limits in Treasury Regulation Section 1.132-9. The employer just can’t deduct the cost anymore. This creates an awkward situation where “there’s really not a strong incentive for the business to provide that fringe benefit,” Jeremy notes.

Bicycle commuting reimbursement fared worse. The Tax Cuts and Jobs Act eliminated both the employer deduction and the employee exclusion entirely. “Beginning with tax year 2018, the qualified bicycle commuting reimbursement is no longer a thing,” Jeremy confirms.

Moving Expense Reimbursements Apply Only to Military and Intelligence

Under IRC Section 217, employers used to be able to exclude from employee income the reimbursement of moving household goods and travel expenses between residences (including lodging but not meals). It was a practical benefit for companies relocating talent.

The Tax Cuts and Jobs Act suspended the exclusion and the individual’s ability to deduct moving expenses. The One Big Beautiful Bill Act made that suspension permanent, with two specific exceptions.

Members of the U.S. Armed Forces on active duty who move pursuant to a military order still qualify. Also, the One Big Beautiful Bill Act added employees or new appointees of the intelligence community, as defined in Section 3 of the National Security Act of 1947.

For everyone else, this is a benefit “we just really won’t see that much anymore,” Jeremy says.

What Benefits Survived?

Not all benefits fell victim to legislative changes. Two Section 132 benefits emerged unscathed.

Qualified Retirement Planning Services (Section 132(m)) allows employers maintaining qualified employer plans to provide tax-free retirement planning advice to employees and their spouses. Jeremy describes this as situations where “you might meet with a financial advisor” when becoming eligible for employer-sponsored retirement plans.

The benefit requires nondiscrimination. Highly compensated employees can participate only if services are available “on substantially the same terms to each member of the group of employees.”

Qualified Military Base Realignment and Closure Fringe (Section 132(n)) compensates military personnel and certain federal civilian employees for housing value declines caused by base closures. Jeremy explains how military bases drive local economies, and when they close, “selling a house could be pretty difficult.”

The Defense Department’s Homeowners Assistance Program provides three payment scenarios:

Private sale: difference between 95% of prior fair market value and actual selling price
Government acquisition: greater of 90% of prior value or mortgage payoff
Foreclosure: payment directly to lienholder

The program is run by the U.S. Army Corps of Engineers and is currently limited to wounded, injured, or ill soldiers and their surviving spouses.

Achievement Awards and the Gym Membership Myth

Beyond Section 132, two benefit categories generate frequent questions (and misconceptions).

Specific Rules for Achievement Awards

Employee achievement awards survived legislative changes intact. Employers can provide tax-free awards for length of service and safety achievements, but the rules are rigid.

Safety achievement awards cannot go to “a manager, administrator, clerical employee, or other professional employee.” Jeremy clarifies the recipient must be “someone that is actually in a line of work within that company where safety could be an issue.” For example, awards can go to workers on factory floors or construction sites, but not office workers.

No more than 10% of eligible employees can receive safety awards annually.

Length of service awards require at least five years of employment. Jeremy notes these are “usually ten, 15, 20 years” in practice.

For both categories, the awards must meet the following requirements:

It must be tangible personal property (such as the “stereotypical gold wristwatch”)
It cannot be cash, cash equivalents, vacations, meals, lodging, event tickets, or securities
The award must involve a “meaningful presentation,” such as a sort of ceremony or all-hands meeting
The award cannot create conditions suggesting disguised compensation

There are also dollar limits to keep in mind. The award value is limited to $1,600 per employee per year for qualified plan awards, and $400 for non-qualified awards. A qualified plan must be written and not discriminate toward highly compensated employees.

Athletic Facilities: The Question That Won’t Die

Jeremy addresses a common question from self-employed clients: “How do I let my business write off my gym membership?”

But gym memberships are inherently personal expenses, and therefore not deductible.

The athletic facilities benefit under IRC Section 132(j-4) requires the facility be “owned or leased and operated by the employer” for the “substantially exclusive use” of employees, spouses, and dependent children.

The following absolutely do not qualify:

Gym memberships
Country club memberships
Personal trainers
Any fitness program open to the public

Jeremy sympathizes with self-employed clients who want to look good for their clientele, but wanting doesn’t make it deductible. The only path requires the business to literally own or operate the gym itself.

The Three-Requirement Test for Accountable Plans

When employees spend their own money on business expenses, accountable plans determine whether reimbursements are tax-free or taxable wages.

The Employee’s Dilemma

IRC Section 62(a)(1) creates a problem. Employees cannot deduct business expenses from their gross income. The Tax Cuts and Jobs Act suspended the old miscellaneous itemized deduction (subject to 2% of AGI), and the One Big Beautiful Bill Act made the exclusions permanent.

Returning to Jeremy’s HVAC technician example, “They get to a site, they are ready to make the repair, but they’re missing a part.” The technician buys it with personal funds. Without proper reimbursement, “this was not a personal expense. This was a business expense. The employee should expect to be reimbursed.”

Three Requirements, Zero Flexibility

Treasury Regulation 1.62-2 establishes three criteria for accountable plans. Miss any one, and “allowances, advancements and reimbursements paid under a non-accountable plan have to be included in the employee’s gross income.”

Requirement 1: Business Connection

The expense must be “ordinary and necessary for the employer” and incurred “in connection with the performance of services as an employee.”

Jeremy warns against payments made “regardless of whether the employee actually incurs or is reasonably expected to incur bona fide employee business expenses.” Those payments automatically fail the test.

Requirement 2: Substantiation

For general expenses, employees must provide documentation “sufficient to enable the payer to identify the specific nature of each expense.” Vague terms like “miscellaneous business expenses” don’t qualify.

For Section 274(d) expenses (travel, meals, vehicle use), strict rules require:

Dates and durations
Locations and distances
Business purpose
Identity of individuals involved

Jeremy emphasizes “receipts or contemporaneous logbooks” as the standard.

Requirement 3: Return of Excess

When providing advances, employers must get back any unsubstantiated amounts. Jeremy gives a simple example: “You give an employee $100 to drive across the county” but receipts total $40. “The employee needs to return the additional $60.”

A safe harbor exists if the company provides quarterly statements showing advances versus substantiated amounts and gives employees 120 days to substantiate or return the excess.

The Cascade Effect of Failure

Revenue Ruling 2006-56 contains a harsh rule. If an arrangement “routinely pays allowances in excess of the amount substantiated without requiring actual substantiation” or repayment, “all the payments, not just the excess, but all payments” become taxable wages.

The Recharacterization Trap

“An arrangement that characterizes taxable wages as nontaxable reimbursements or allowances doesn’t satisfy the business connection requirement,” Jeremy points out, emphasizing a critical limitation.

This comes up frequently with S-corporation shareholder-employees who engage advisors mid-year. “We can’t go back in the past and look at that and try to recharacterize some of those wages. That is not allowed,” Jeremy explains.

Who’s Excluded

Independent contractors fall outside accountable plan rules entirely. Jeremy clarifies that reimbursements “need to be included in the gross income that’s reported as payments to that independent contractor” on Form 1099-NEC. The contractor then deducts the expense themselves.

Partners in partnerships create a gray area. “I don’t really see a case for using accountable plans for partners in partnerships,” Jeremy says. Instead, handle reimbursements through the partnership agreement, with unreimbursed expenses deducted on page two of Schedule E.

Protecting Clients from Costly Mistakes

The fringe benefit rules have permanently changed, and the remaining benefits require careful implementation. As Jeremy concludes, employers must understand the rules “whenever they provide any sort of benefit or compensation to employees that they want to be deductible and/or excludable.”

Accountable plans are a critical mechanism for separating tax-free reimbursements from unexpected wage income, but the three requirements don’t allow for partial compliance.

Practitioners must know what’s permitted and work to correct persistent misconceptions. Gym memberships don’t become deductible because clients want them to be, and companies can retroactively reclassify wages.

The stakes justify the diligence. Every employer who mishandles these benefits creates lost deductions for the business and unexpected taxable income for employees. And nobody wants that.

This concludes Jeremy’ three-part series on fringe benefits and accountable plans. Listen to the full episode for complete details, and check out part one and part two covering qualified employee discounts, no-additional-cost services, working condition fringes, and de minimis benefits.

The Math Behind Tax-Free Employee Discounts That Most Businesses Get Wrong

Earmark Team · January 24, 2026 ·

Picture an airline employee boarding a flight home after visiting family, slipping into an empty seat at the last minute without paying a dime. Is this a tax-free perk or unreported income? The answer hinges on one crucial detail that could mean thousands of dollars in tax liability, whether that seat was reserved or simply excess capacity.

In this first episode of a multi-part series on tax-free employee benefits, Tax in Action host Jeremy Wells, EA, CPA, breaks down the complex world of no-additional-cost services and qualified employee discounts under IRC Section 132. As Jeremy explains, “Employers are constantly trying to figure out ways to encourage either prospective employees to want to come work for them, or for current employees to want to stay.” These benefits have become essential recruiting tools, yet their tax-free status depends on following precise technical requirements.

The Starting Point: Everything Is Taxable Unless…

Jeremy begins with a reality check that sets the stage for everything that follows. “IRC 61(a)(1) includes in compensation for services, commissions, fringe benefits, and similar items in gross income,” he emphasizes. “So in other words, if you get some sort of fringe benefit from your employer, it’s taxable unless there is some specific exception in the code.”

This means every perk, discount, or free service an employer provides is taxable compensation by default. Section 132 provides specific exceptions, but only if employers and employees follow the rules. Miss one requirement, and that tax-free benefit becomes taxable wages subject to withholding, penalties, and interest.

This episode focuses on two of the most common Section 132 benefits: no-additional-cost services and qualified employee discounts.

No-Additional-Cost Services: The Excess Capacity Exception

The concept seems simple enough: if providing a service to an employee doesn’t cost the employer anything extra, the employee can receive it tax-free. But as Jeremy explains, employers have to meet multiple requirements.

A no-additional-cost service must be “one provided to an employee for personal use,” Jeremy notes. “It’s ordinarily offered for sale to customers, and it incurs no substantial additional cost or foregone revenue when provided to the employee.”

The Reservation Problem

Jeremy returns repeatedly to airline examples because they perfectly illustrate the distinction between acceptable and problematic benefits. When discussing an empty airline seat, he explains, “The airline wasn’t going to sell that ticket anyway. So the airline isn’t losing anything. It’s not paying any more than it had to to add one more passenger to that flight.”

This is true excess capacity. Once the plane door closes, that empty seat has no value so letting an employee use it costs nothing.

But Jeremy warns about a critical limitation. “Employers can’t exclude reserved services.” If an employee reserves a seat while customers can still book the flight, “that airline potentially loses revenue if a customer wants to book that flight but can’t because the employee took the last seat.”

The employee could still take that reserved seat without paying, but “the airline would need to add the value of that ticket to the employee’s compensation as taxable income as part of the employee’s wages.”

Calculating Substantial Additional Cost

Determining whether a service incurs “substantial additional cost” requires careful analysis. “The employer has to include the cost of labor incurred in providing the service,” Jeremy explains. For modern service businesses, this can be challenging. While a manufacturer can easily track labor hours per widget, service businesses often struggle to allocate labor costs to specific services.

Jeremy offers some relief through the concept of “incidental services.” If a service is secondary to normal operations, it “generally doesn’t incur substantial additional cost.” This gives employers a near-safe harbor for ancillary services.

However, there’s a catch: “The employer incurs substantial additional cost if the employer or its employees spend a substantial amount of time providing the service to employees.” The vagueness is frustrating. “We don’t really get more detail than that,” Jeremy points out.

Reciprocal Agreements: Trading Services Tax-Free

One interesting provision allows unrelated companies to trade services. “An employer has to have an agreement with an unrelated other employer,” Jeremy explains, outlining three requirements:

It must be a written reciprocal agreement
The employee could exclude the value if their own employer provided it
Neither employer can incur substantial additional cost

Jeremy emphasizes a crucial restriction. “If there are any payments involved between the two companies, then that is by definition a substantial additional cost and the entire agreement breaks down.” The exchange must be pure barter—services for services, no money changing hands.

Qualified Employee Discounts: Different Rules for Products and Services

While no-additional-cost services focus on excess capacity, employee discounts involve mathematical calculations that vary dramatically between services and products.

The 20% Rule for Services

For services, there is a clear bright-line test: “A discount on a service can’t exceed 20% of the price offered by the employer to customers.”

Using a simple example, “If your business provides a particular service to its customers for $100, then you can offer that same service to your employees for no less than $80” without tax consequences. Charge $70, and that extra $10 becomes taxable wages.

Gross Profit Calculations for Products

Product discounts follow a completely different formula. “The discount can’t exceed the gross profit percentage on the price offered by the employer to customers,” Jeremy explains. This requires complex calculations.

Jeremy walks through a practical example using a lawn equipment retailer offering employee discounts on push mowers. The store can’t just pick one model; it must aggregate. “Let’s look at the aggregate sales price. So of all of our push lawn mowers, what is the aggregate sales price of all of them?”

The calculation averages across the entire product line. “Some of them are going to be cheap. Some of them are going to be expensive. Some of them are going to be top of the line.” The employer calculates both average selling price and average cost to determine the gross profit percentage and that becomes the maximum tax-free discount.

The 35% Group Discount Rule

If a business regularly offers discounts to customer groups, such as seniors or military, and those sales comprise at least 35% of total sales, the discounted price becomes the baseline. “We’re trying to avoid inflating the price to act like we can afford a bigger discount for our employees,” Jeremy explains.

When multiple discount groups exist, employers can “choose the most common discount, the one producing the largest share of total discounted sales as the benchmark. Or if there’s a tie, it can average between them.”

What Can’t Be Discounted

Jeremy identifies surprising exclusions, including real estate, buildings, and land, and personal property usually held for investment, such as securities, commodities or currencies.”

Even businesses that primarily deal in these items, such as real estate brokerages and securities firms, cannot offer tax-free employee discounts on their main products.

Unlike no-additional-cost services, Jeremy makes clear that employee discounts have a major limitation. “You can’t create a reciprocal arrangement with another company to provide discounts on goods or services.”

The Compliance Framework: Who Qualifies and How to Document

Beyond the mathematical requirements are administrative challenges that can transform simple perks into compliance nightmares.

Nondiscrimination Requirements

Highly compensated employees—those earning over $160,000 in 2025 or owning 5% or more of the business—face special restrictions. They “can exclude no additional cost services, but only if the employer offers that service on substantially the same terms to each member of a group of employees.”

Jeremy provides a practical example of acceptable classification. “Once a new employee works for the business for at least six months or one year, then that employee is now eligible for the fringe benefit.” This creates an objective standard applying equally to all compensation levels.

Line-of-Business Limitations

This requirement emerged from the corporate consolidation era. “You started seeing businesses merging and acquiring other businesses,” Jeremy observes, “and pretty soon a business didn’t offer just one type of good, it might offer ten, 20, or 50 different kinds.”

The rule is, employees can only receive tax-free benefits for goods or services related to their line of business. Jeremy offers a clear example: “A bank can’t provide discounted apparel or groceries to its employees if it doesn’t also primarily sell clothing and groceries to its customers.”

However, employees supporting multiple divisions qualify more broadly. Administrative staff, IT professionals, and other infrastructure workers who benefit multiple lines of business can receive benefits from any division they support, even indirectly.

The Outdated Classification System

Determining lines of business relies on the Standard Industrial Classification system, which Jeremy notes was developed in 1938 and hasn’t been updated since 1974. Many modern businesses operate in industries that didn’t exist when these codes were created. While the Treasury proposed updating to the modern NAICS system in August 2024, employers must still navigate using pre-internet classifications.

Documentation Requirements

Jeremy concludes with essential documentation advice:

Document employees’ regular work to prove line-of-business compliance
Confirm services/products are offered to customers ordinarily
Quantify any costs or foregone revenue for no-additional-cost services
Calculate and document gross profit percentages
Maintain pricing records from when benefits were provided

“Document the terms of the benefit, ideally in writing,” Jeremy emphasizes, suggesting inclusion in employee manuals.

Looking Ahead: More Benefits to Come

Section 132 benefits reveal how simple concepts, such as free services and employee discounts, become complex compliance exercises requiring careful calculation and documentation. Yet for employers competing for talent, mastering these rules is essential for offering competitive compensation packages without triggering unexpected tax consequences.

Jeremy promises to continue this series in the next episode: “We’ll keep looking at Section 132 with working condition fringe benefits and de minimis fringe benefits.”

For tax professionals advising clients or business owners designing benefit packages, understanding these requirements is about maximizing value for employees while avoiding costly mistakes. The difference between a valued perk and a tax liability often lies in a single detail, such as whether a seat was reserved or whether discounts were properly calculated.

Listen to the full episode of Tax in Action to hear Jeremy break down each requirement with the clarity that makes complex rules immediately applicable in your practice.

Why Your Clients Keep Losing Good Employees and How You Can Fix It

Blake Oliver · August 27, 2025 ·

Small businesses are losing talent and money through employee turnover while a proven solution sits right under their noses—one that their accountants could easily provide, but rarely do. The numbers are stark: companies lose productivity, face constant recruiting costs, and struggle to compete for quality employees. Yet most business owners don’t know that offering benefits could dramatically reduce these problems, and their trusted financial advisors aren’t telling them.

That’s the message from a recent Earmark Podcast episode featuring Justin Kurn, Chief Revenue Officer of Dark Horse CPAs, a firm that doubled revenue from $6 million to $12 million in just one year, and Julia Miller, GM and Head of Product – Benefits at Gusto. Their conversation revealed a massive disconnect between what small businesses desperately need and what they currently receive from their professional service providers.

The Hidden Cost of Employee Turnover and the Benefits Solution

Small businesses lose money due to a problem they don’t fully understand while ignoring a solution that’s both affordable and proven. Employee turnover quietly erodes the bottom line, yet most business owners don’t realize that benefits can solve this crisis.

Research at Gusto reveals numbers that should make every small business owner and their accountant pay attention. “Small businesses that offer 401(k) have 40% lower employee attrition in the first year of employment than small businesses that don’t,” she explains. “Small businesses that offer health insurance have 25% lower attrition in the first year.”

These aren’t small improvements. Employee retention directly impacts profitability. When employees leave within their first year, businesses lose productivity, institutional knowledge, and momentum. They face constant training cycles, disrupted team dynamics, and the opportunity cost of what that departing employee could have contributed.

Yet most small business owners approach benefits with a fundamental misconception that costs them dearly. “Businesses think of benefits as an immediate cost increase to their business when it actually is not,” Kurn observes from his experience working with hundreds of small businesses. The knee-jerk reaction is always the same: business owners assume they’ll need to pay 20, 30, or 40% more in payroll costs to cover employee health insurance and retirement contributions.

But most don’t realize that simply providing access to benefits, even when employees pay the premiums themselves, can be transformative. The value isn’t necessarily in what the employer contributes, but in what they make possible. As Justin points out, when you run the numbers, “if the options are I either give them a raise or I add benefits, benefits is probably the right option,” once you factor in payroll taxes and other considerations.

Perhaps more importantly, offering benefits widens the talent pool available to small businesses. “It’s not that the same candidate stays longer, it’s that a different candidate you didn’t even explore before is coming to you and staying longer,” Justin explains. Skilled employees who can demand and receive comprehensive compensation packages simply won’t consider positions that don’t offer benefits. By not providing these options, small businesses automatically exclude themselves from competing for top talent.

This creates a cycle: without benefits, businesses can only attract employees who can’t demand better packages elsewhere. These employees are often less committed, less skilled, and more likely to leave quickly when something better comes along. Meanwhile, companies offering benefits access an entirely different candidate pool of professionals who think strategically about their total compensation and career stability.

The Massive Advisory Gap and Competitive Opportunity

It’s shocking how few small businesses get the guidance they need. “Ten percent of our customers get benefits-related advice from their accountants,” Miller reveals. “Just imagine what we could do for the small business community in this country if that 10% went to 50%.”

Think about that for a moment. Nine out of ten small businesses struggle with employee retention, losing money through turnover, and missing out on accessing better talent pools, all while their trusted advisors remain silent on a solution that could transform their companies. This is a huge opportunity for accountants who recognize what’s happening.

Dark Horse CPAs understood this shift and built their explosive growth around it. The firm began building its advisory services at the tail end of 2022. They added benefits to their service menu and fundamentally changed how they engage with clients, moving from reactive compliance work to proactive strategic guidance.

Recognizing the trigger points and knowing how to act on them is crucial. Kurn’s team watches for three critical signals: revenue growth, staff growth, and high employee turnover. When they spot these patterns, “it’s a question of, not if, but when,” Justin emphasizes. “If you plant the seed of when, it’s like, ‘well, this is a necessary step in my growth and development as a business.’”

This subtle shift in messaging completely changes the client’s mindset. Instead of viewing benefits as an optional expense they might never need, clients begin to see it as an inevitable step in their business evolution. The conversation moves from “Do I really need this?” to “When should we implement this?”

The beauty of this approach is that it doesn’t require accountants to become benefits experts overnight. “If you focus just on compliance and blocking and tackling, these are not conversations that you’re privy to,” Justin notes. “But if you’re in the seat of the advisor, these conversations do come up either directly or indirectly.” The key is positioning yourself to hear these conversations and knowing when to act on them.

What makes this opportunity even more compelling is most accounting firms aren’t even trying to capture it. While Dark Horse doubled its revenue by embracing advisory services, their competitors remain stuck in the traditional compliance mindset. This creates a massive first-mover advantage for firms willing to make the shift now.

The Practical Path to Benefits Advisory Success

Shifting from transactional payroll processing to strategic benefits advisory doesn’t require accountants to become licensed insurance brokers overnight. Instead, you need to understand how to facilitate the process while positioning yourself as the trusted advisor throughout the journey. Dark Horse’s model leverages both technology and authenticity to create genuine value for clients.

Gusto’s platform enables what Kurn calls “self-discovery.” Rather than requiring accountants to lead every conversation and manage every detail, roughly 60% of Dark Horse’s clients actually discover and explore benefits options independently through the platform, then return to their accountants for validation and guidance. “They can self-assess quite often and look for validation from the accountant’s side, and then support during the process,” Kurn explains.

This model works because Gusto’s user experience encourages exploration rather than intimidating users. “Clients dump it onto their accountant because it’s like, ‘I don’t even want to go in here. I don’t even know how to get in here.’ Gusto is different,” Kurn notes. The platform follows an intuitive path that allows business owners to understand their options without feeling overwhelmed by complexity.

But the secret weapon that makes Dark Horse’s approach so effective is authenticity. “The best sales tool or the best advisory tool comes from a place of authenticity,” Kurn emphasizes. Dark Horse uses Gusto benefits for the firm, which means every team member experiences the platform as an end user. When clients have questions about the employee experience, Kurn can show them what they’ll see because he uses it himself.

This authenticity eliminates the biggest barrier many accountants face when considering benefits advisory work: the fear they’ll need to become benefits experts and “sell” something they don’t fully understand. Instead, it becomes a natural conversation: “Do you want to see? I could actually show you what the experience is as an employee. Like, this is what I see because I use it myself,” Kurn explains.

When clients are ready to move forward, Gusto provides licensed human advisors who can partner with accountants to help answer complex questions and guide clients through the selection process. This means accountants don’t have to become benefits experts. They just need to recognize when clients need this guidance and facilitate the connection.

The implementation process minimizes the burden on accountants and business owners. For new benefits offerings, Miller explains that while clients typically shop a few months ahead, the actual implementation can be compressed to about four weeks when necessary. The business owner’s involvement can be minimal. They need to understand what they’re signing up for and sign the necessary documents, but Gusto handles the heavy lifting of carrier coordination, employee communication, and enrollment management.

Most importantly, this advisory approach translates directly into significantly higher revenue for accounting firms willing to make the shift. Kurn’s pricing strategy is straightforward. The firm treats benefits implementation as project-based work with ongoing advisory fees that typically run two to three times higher than transactional services.

“There’s a three times delta between these two things. That’s the value to the firm if you can get into the seat of the advisor,” Kurn emphasizes. This isn’t about charging more for the same service. It’s about providing valuable, strategic guidance that justifies premium pricing.

The Time to Act is Now

This perfect storm of opportunity won’t last forever. Small businesses are struggling with employee retention, losing talented workers they can’t afford to lose. Offering benefits can slash turnover rates by 25% to 40%. Yet nine out of ten businesses don’t get this crucial guidance from their trusted advisors.

For the accounting profession, this is a chance to transform how we serve clients and position our firms in the marketplace. Dark Horse CPAs didn’t just stumble into doubling their revenue; they recognized their clients’ need for strategic guidance.

But this window won’t stay open indefinitely. As more accounting firms recognize this opportunity and begin offering benefits advisory services, the competitive advantage will diminish. The firms that act now, while 90% of their competitors remain stuck in transactional mode, stand to capture significant market share and establish themselves as the go-to advisors for growing businesses.

Start by implementing Gusto benefits for your firm to gain authentic experience with the platform. Begin watching for those trigger points Kurn identified: revenue growth, staff growth, and high employee turnover. When you spot these signals, initiate the conversation using “when” language rather than “if” language.

Most importantly, don’t let fear of the unknown hold you back. You don’t need to become a benefits expert overnight. You need to become the trusted advisor who recognizes when clients need this guidance and connects them with the right resources. The expertise already exists through platforms like Gusto’s licensed advisors. Your role is to facilitate access to it while providing the strategic oversight your clients depend on.

The small businesses in your portfolio are waiting for this guidance, whether they realize it or not. They’re struggling with employee retention, losing sleep over recruiting costs, and missing out on talented candidates who won’t even consider positions without benefits.

Don’t let this massive opportunity pass by. Listen to the full Earmark Podcast episode to hear Justin Kurn and Julia Miller’s complete playbook for transforming your practice through benefits advisory services. Your clients need this guidance, the data proves its effectiveness, and your competitors might not be providing it yet. Will you be among the first to capture it? Or among the last to realize what you missed?