Treasury Regulations · 26 CFR
§ 31.3306(b)-1. Wages.
Regulation text, no changes From the eCFR, current as of October 15, 2026. The eCFR is an authoritative but unofficial editorial compilation of the Code of Federal Regulations; the official text is the annual CFR on govinfo. Compare it with this section on ecfr.gov (external site) or the official annual CFR on govinfo (external site).
Regulation under 26 U.S.C. § 3306(b)
Cite as 26 CFR § 31.3306(b)-1
At a glance
Read from the text and its source citation. Not part of the regulation.
- Status
- In the current eCFR
- Issued
- December 20, 1960 by T.D. 6516
- Last amended
- September 17, 2003 by T.D. 9092
- Issued under
- 26 U.S.C. § 3306(b)
- Length
- 878 words · about 4 min to read
- Defines
- 1 term
- Cross-references
- cites 1 Code section and 6 regulations; cited by 4
¶(a) Applicable law and regulations—
¶(1) Remuneration paid after 1954. Whether remuneration paid after 1954 for employment performed after 1938 constitutes wages is determined under section 3306(b). Accordingly, only remuneration paid after 1954 for employment performed after 1938 is covered by this section of the regulations and by the sections relating to the statutory exclusions from wages (§§ 31.3306(b)(1)-1 to 31.3306(b)(10)-1).
¶(2) Remuneration paid after 1939 and before 1955. Whether remuneration paid after 1939 and before 1955 for employment performed after 1938 constitutes wages shall be determined in accordance with the applicable provisions of law and of 26 CFR (1939) Part 403 (Regulations 107).
¶(3) Remuneration paid in 1939. Whether remuneration paid in 1939 for employment performed after 1938 constitutes wages shall be determined in accordance with the applicable provisions of law and of 26 CFR (1939) Part 400 (Regulations 90).
¶(b) The term “wages” means all remuneration for employment unless specifically excepted under section 3306(b) (see §§ 31.3306(b)(1)-1 to 31.3306(b)(10)-1, inclusive) or paragraph (j) of this section.
¶(c) The name by which the remuneration for employment is designated is immaterial. Thus, salaries, fees, bonuses, and commissions are wages if paid as compensation for employment.
¶(d) The basis upon which the remuneration is paid is immaterial in determining whether the remuneration constitutes wages. Thus, it may be paid on the basis of piecework or a percentage of profits; and it may be paid hourly, daily, weekly, monthly, or annually.
¶(e) Except in the case of remuneration paid for services not in the course of the employer's trade or business (see § 31.3306(b)(7)-1), the medium in which the remuneration is paid is also immaterial. It may be paid in cash or in something other than cash, as for example, goods, lodging, food, or clothing. Remuneration paid in items other than cash shall be computed on the basis of the fair value of such items at the time of payments.
¶(f) Ordinarily, facilities or privileges (such as entertainment, medical services, or so-called “courtesy” discounts on purchases), furnished or offered by an employer to his employees generally, are not considered as remuneration for employment if such facilities or privileges are of relatively small value and are offered or furnished by the employer merely as a means of promoting the health, good will, contentment, or efficiency of his employees. The term “facilities or privileges”, however, does not ordinarily include the value of meals or lodging furnished, for example, to restaurant or hotel employees, or to seamen or other employees aboard vessels, since generally these items constitute an appreciable part of the total remuneration of such employees.
¶(g) Amounts of so-called “vacation allowances” paid to an employee constitute wages. Thus, the salary of an employee on vacation, paid notwithstanding his absence from work, constitutes wages.
¶(h) Amounts paid specifically—either as advances or reimbursements—for traveling or other bona fide ordinary and necessary expenses incurred or reasonably expected to be incurred in the business of the employer are not wages. Traveling and other reimbursed expenses must be identified either by making a separate payment or by specifically indicating the separate amounts where both wages and expense allowances are combined in a single payment. For amounts that are received by an employee on or after July 1, 1990, with respect to expenses paid or incurred on or after July 1, 1990, see § 31.3306(b)-2.
¶(i) Remuneration paid by an employer to an individual for employment, unless such remuneration is specifically excepted under section 3306(b), constitutes wages even though at the time paid the individual is no longer an employee.
¶Example.
A is employed by B, an employer, during the month of June 1955 in employment and is entitled to receive remuneration of $100 for the services performed for B during the month. A leaves the employ of B at the close of business on June 30, 1955. On July 15, 1955 (when A is no longer an employee of B), B pays A the remuneration of $100 which was earned for the services performed in June. The $100 is wages, and the tax is payable with respect thereto.
¶(j) In addition to the exclusions specified in §§ 31.3306(b)(1)-1 to 31.3306(b)(10)-1, inclusive, the following types of payments are excluded from wages:
¶(2) Remuneration for services which are deemed not to be employment under section 3306(d) (§ 31.3306(d)-1).
¶(3) Tips or gratuities paid directly to an employee by a customer of an employer, and not accounted for by the employee to the employer.
¶(k) For provisions relating to the treatment of deductions from remuneration as payments of remuneration, see § 31.3307-1.
¶(l) Split-dollar life insurance arrangements. Except as otherwise provided under section 3306(r), see §§ 1.61-22 and 1.7872-15 of this chapter for rules relating to the treatment of split-dollar life insurance arrangements.
[T.D. 6516, 25 FR 13032, Dec. 20, 1960, as amended by T.D. 6658, 28 FR 6636, June 27, 1963; T.D. 7375, 40 FR 42350, Sept. 12, 1975; T.D. 8276, 54 FR 51028, Dec. 12, 1989; T.D. 8324, 55 FR 51697, Dec. 17, 1990; T.D. 9092, 68 FR 54361, Sept. 17, 2003]
Terms defined here
Where the text says “the term … means”. Select a term to jump to its definition.
Cross-references
Computed from the citations in the text of 26 CFR.
Code sections it cites
Regulations it cites
- § 31.3306(b)(1)-1 $3,000 limitation.
- § 31.3306(b)(7)-1 Payments other than in cash for service not in the course of employer's trade or business.
- § 31.3306(b)-2 Reimbursement and other expense allowance amounts.
- § 31.3306(d)-1 Included and excluded service.
- § 31.3307-1 Deductions by an employer from remuneration of an employee.
- § 1.61-22 Taxation of split-dollar life insurance arrangements.
Cited by 4 other regulations
Amendment history
From the source citation at the end of the section, newest first. T.D. is a Treasury decision; FR is the Federal Register.
- Amended by T.D. 9092 (68 FR 54361)
- Amended by T.D. 8324 (55 FR 51697)
- Amended by T.D. 8276 (54 FR 51028)
- Amended by T.D. 7375 (40 FR 42350)
- Amended by T.D. 6658 (28 FR 6636)
- Issued by T.D. 6516 (25 FR 13032)
Where it sits in 26 CFR
- Subchapter C Employment taxes and collection of income tax at source
- Part 31 Employment taxes and collection of income tax at source
- Subpart D Federal Unemployment Tax Act (Chapter 23, Internal Revenue Code of 1954)
Nearby sections
- § 31.3302(c)-1 Limit on total credits.
- § 31.3302(d)-1 Definitions and special rules relating to limit on total credits.
- § 31.3302(e)-1 Successor employer.
- § 31.3306(a)-1 Who are employers.
- § 31.3306(b)-1 Wages.
- § 31.3306(b)-1T Question and answer relating to the definition of wages in section 3306(b) (Temporary).
- § 31.3306(b)-2 Reimbursement and other expense allowance amounts.
- § 31.3306(b)(1)-1 $3,000 limitation.
- § 31.3306(b)(2)-1 Payments under employers' plans on account of retirement, sickness or accident disability, medical or hospitalization expenses, or death.