Updated: September 17, 2026 • 18 min read
Published By:
Jon Davis
According to Wellhub’s 2025 State of Work-Life Wellness report, 85% of US employees say their well-being As an employer, covering the cost of gym memberships is one way to promote employees’ holistic wellness.
But once you start offering this perk, you might wonder what it means for your taxes. Are gym memberships tax-deductible for businesses?
In most cases, the answer is no. You can only write off gym memberships in specific situations. Knowing when they qualify as deductible business expenses can help reduce your taxable income. We’ll cover what typically qualifies and key considerations for employers.
IRS rules state that for a business expense to be deductible, it must be both ordinary and necessary. But what does that mean exactly?
Gym membership is tax-deductible for self-employed professionals in a related industry, such as fitness instructors and personal trainers. That’s because in most cases, they need access to the gym to run their business — they buy a membership to train clients rather than do personal workouts.
In some cases, the cost of gym benefits might still qualify as a business deduction even if you’re not in the fitness industry. For example, if you offer gym memberships as part of an employee wellness program, you can deduct them from from your company’s taxable income.
“If you’re a self-employed taxpayer in a related industry, such as a personal trainer, then your gym membership will most likely be a deductible business expense. If you’re a business owner with employees and provide reimbursements for gym memberships as a wellness benefit, then the cost of those reimbursements would be treated as a tax-deductible business expense.”
— Peggy James, CPA and OnPay contributor
Gym membership is tax-deductible for self-employed professionals in a related industry, such as fitness instructors and personal trainers. That’s because in most cases, they need access to the gym to run their business — they buy a membership to train clients rather than do personal workouts.
In some cases, the cost of gym benefits might still qualify as a business deduction even if you’re not in the fitness industry. For example, if you offer gym memberships as part of an employee wellness program, you can write off the cost from your company’s taxable income.
“As with many things related to taxes, it depends. If you’re a fitness professional and pay for a gym membership to see clients, that would be a deductible business expense. If you use a gym membership for your own health, then it’s unlikely to be deductible as a personal expense.”
— Peggy James, CPA
To be deductible, medical expenses have to be more than 7.5% of your adjusted gross income (AGI). AGI is your total income for the year after certain adjustments, such as retirement contributions and student loan payments.
Only the amount that exceeds the 7.5% threshold counts as a deduction, according to the IRS.
Here’s an example:
Sam’s AGI is $60,000 per year. If he spent $6,000 on qualified medical care during that period, what portion of the medical expenses is tax-deductible?
7.5% of $60,000 = $4,500
That means:
To claim a deduction, you need to show the costs qualify as medical care, not general health improvement. Receipts itemizing the specific program fee, along with a doctor’s notes tying it to a diagnosed condition, can help.
“OnPay is so easy to use. They take care of payroll taxes and any deductions. They also keep a calculation on employees’ PTO and offer direct deposit. All I have to do is enter the employee’s hours, approve the payroll, and OnPay takes care of the rest. This means I spend very little time working on payroll and more time helping clients. Customer support is quick to respond, friendly, and helpful!”
— Lacie, Reflections Mental Health, LLC
Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) let employees set aside tax-free money for qualified medical expenses. Both employees and employers can contribute to the accounts. Employees usually fund the accounts through pre-tax payroll deductions. As an employer, contributing to either account is optional, but there’s an advantage: your contributions are tax-deductible, and the benefit can boost employee morale.
Employees can pay healthcare costs directly with an HSA or FSA debit card, where available, or pay out of pocket and get reimbursed later. Either way, the cost must meet the IRS’s definition of qualified medical expenses to qualify.
Generally, a gym membership itself doesn’t meet that definition, even with a doctor’s recommendation. The IRS specifically excludes health club and gym membership dues from qualifying medical expenses. What can qualify is a separate, itemized fee for a specific program tied to a diagnosed condition, such as:
The IRS says employees can use HSA or FSA funds to pay for a gym membership in very specific scenarios. The membership has to be prescribed by a doctor either to treat a particular medical condition or to help an employee’s body function better.
“Generally speaking, gym memberships purchased by employees will not be HSA eligible since they would not be considered qualifying medical expenses.”
— Peggy James, CPA
If you want to offer gym perks as part of your company’s wellness program or total rewards strategy, there are ways to do it without missing out on tax deductions.
For example, you can provide an off-site gym membership as a fringe benefit. That membership counts as additional taxable compensation for employees. Employee wages are generally ordinary and necessary business expenses, so you can still deduct the cost.
There’s also a more tax-favorable option if you have the space to provide an onsite gym. Under IRC Section 132(j)(4), a gym or athletic facility you own or lease and operate is entirely tax-free to employees, with no wage inclusion at all, as long as substantially all of its use is by employees, their spouses, and dependent children rather than the general public. You can still deduct the cost of operating the facility as an ordinary and necessary business expense, and your employees don’t pick up any taxable income for using it.
You can also contribute to employee HSA or FSA accounts to help cover qualified wellness expenses employees pay out of pocket. Employer contributions to these accounts are tax-deductible.
If a gym membership is directly tied to your business, such as fitness instructors training clients, the IRS treats it as a business expense, even if a doctor recommends it for health reasons. Only a separate, itemized program fee tied to a diagnosed condition qualifies as a medical expense.
The same personal-versus-business test comes up across a lot of common expenses, such as meals and entertainment deductions, office furniture tax deductions, and the home office tax deduction. They all hinge on whether the cost is primarily for the business or primarily for you.
For gym memberships to be legitimate business costs, they must meet the IRS’s definition of ordinary and necessary expenses.
But what if gym membership is partly personal and partly business-related? If the primary purpose is general health, it’s personal, and that disqualifies the cost as a deduction.
Whether a gym membership counts as a write-off depends on why you use it. Here’s a quick look at what the IRS generally allows — and what it doesn’t.
| Scenario | Is this cost-deductible? | Reason |
| A personal trainer buys a gym membership to train clients. | Yes | It’s an ordinary and necessary expense in the fitness industry. |
| A fitness influencer buys a gym membership to create workout content. | Yes | The membership supports content creation that directly relates to the influencer’s income. |
| A desk worker joins a gym for general fitness. | No | The IRS doesn’t consider the cost a business or medical expense deduction. |
| A doctor prescribes gym time to treat obesity or injury. | No | The membership itself doesn’t qualify as a medical expense, even with a diagnosis. |
Providing team members with access to gym memberships can boost both personal health and workplace performance. However, deciding what to include in your payroll budget and which wellness perks to offer requires careful consideration of the tax implications and administrative requirements.
The key is ensuring you have proper documentation and that any gym-related expenses meet IRS criteria for deductibility. Whether it’s structuring memberships as part of a formal wellness program, building an onsite facility, reimbursing separate program fees tied to a diagnosed condition through an HSA or FSA, or treating memberships as taxable fringe benefits, the right approach depends on your specific business situation.
Remember to keep detailed records, establish clear policies about eligibility and reimbursement procedures, and consult with a tax professional to ensure you comply with current regulations.
Start using OnPay today and see how we make it simple to take care of your team.
Jon Davis is the Sr. Content Marketing Manager at OnPay. He has over 15 years of experience writing for small and growing businesses. Jon lives and works in Atlanta.
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Many small business owners default to reimbursing employees for off-site gym memberships, not realizing those reimbursements are taxable wages for employees. A less-used but more favorable option is providing an onsite facility. A gym you own or lease and operate is entirely tax-free to employees, as long as it’s used by employees, their spouses, and dependents rather than the general public. You still get to deduct the cost of running it, and it doesn’t count as taxable wages to employees.
This refers to the de minimis safe harbor election under Treasury Regulation 1.263(a)-1(f). If your business doesn’t have an applicable financial statement, you can immediately deduct tangible property costing $2,500 or less per item or invoice, rather than depreciating it over several years. If you set up an onsite gym, this applies to equipment like weights, mats, or a treadmill priced under that threshold. You need a written accounting policy in place before the start of the tax year and must attach an election statement to your timely filed return.
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