Failure to give the employee full discretion in the handling and sale of the commodities may cause such wages to be subject to social security taxes. Often employers compensate employees with commodities to avoid paying social security taxes. While it may reduce FICA and labor costs, it may also jeopardize the disability and retirement benefits of the employee. Social security benefits are based on contributions made by employees during their working years. Hence, lower contributions mean lower benefits upon retirement or disability.
Housing is sometimes available for an employee.
Such housing makes excellent compensation for the employee, since the house is generating no income for the employer while vacant and it can reduce the employee's cost of living. The housing must be furnished on the business premises. The housing must be furnished for the employer's convenience. The employee must be required to accept the housing as a condition of employment. If there is no cost to the employer, the use of business assets is not considered taxable income to the employee.