Qualified Employee Discount Law and Legal Definition

Qualified employee discount means discount granted to employees and their families that does not exceed 20 percent of the price of qualified services or gross profit percentage of qualified property that are offered to customers of an employer. For a discount to be a qualified employee discount such discount must apply to qualified property or services that are offered for sale to customers in the ordinary course of business of an employer in which the employee performs his/her services.

The term "qualified employee discount" is defined under 26 USCS § 132 (c)(1) as any employee discount with respect to qualified property or services to the extent such discount does not exceed:

(A) in the case of property, the gross profit percentage of the price at which the property is being offered by the employer to customers; or

(B) in the case of services, 20 percent of the price at which the services are being offered by the employer to customers.