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Level 1

Trade Work: Work Exchange for Gym Membership Question

Hey everyone!! 


I run a Crossfit Gym in 
Arizona and we have approx. 10 coaches that I would like to set up to work in exchange for a gym membership. I understand that they need to declare the gym membership as income I am just not sure how exactly to set them up, 1099(if they meet the requirements) or as W-2? I am not trying to be cheap but if I don't have to pay payroll taxes then that is plus. They are currently set up as W-2. Please help!!! 

3 Comments 3
Not applicable

Trade Work: Work Exchange for Gym Membership Question

Hey @Mishka,


Welcome to the community. Awesome to hear about your Crossfit Gym - my sister is a coach at a CF Gym and she absolutely loves her job!


Would you mind clarifying your situation a bit more? So, these 10 coaches are currently your official employees (you pay them a set wage and send them W-2s)? Are you trying to switch them over to independent contractors? Are you trying to give them gym memberships instead of pay or just provide the memberships to supplement their existing pay? 


The payroll tax question is a complicated one - I'd recommend reaching out to a local tax professional. For the absolute authority on tax rules, the best place to look is "the authority" - the IRS! Here are their published 1099 and W-2 requirements and pay extra attention to the language used.

Level 5

Trade Work: Work Exchange for Gym Membership Question

Hi Mishka.  If those coaches work set hours at your place of business on your equipment it would be ill advised to classify them as 1099 independent contractors.  It's all about the "right of control" over their time and schedule.  Bartering for gym memberships might be something you'd do 'off the books' for freelance coaches/trainers who have private clients that train at your facility.   If the coaches are working set hours doing your bidding they are employees, you will need to pay them as such.  Cheers!

Not applicable

Trade Work: Work Exchange for Gym Membership Question

I 100% agree with @WineGuy, he knows a lot about both types of workers and the importance of differentiating W-2 employees from and 1099 contractors. 

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