You’re running a business and making time for fitness? Way to crush those goals! If mid-workout you’ve found yourself wondering if you can write off your gym membership, then this post is for you. I’m breaking down everything you need to know about gym memberships and your small business taxes.

Are gym memberships and workout classes business expenses?

I know what you’re thinking: My gym membership is improving my health, energy, and focus at work, so it’s definitely helping my business! It must count as a business expense!

Unfortunately, even though I 100% agree with your thinking, the IRS doesn’t follow that same line of reasoning. In the eyes of the IRS, for any business expense to be deductible, it must meet these 2 tests:

• Is it “ordinary,” meaning is it a common and accepted expense in your line of business?
• Is it “necessary,” meaning is it helpful and appropriate for your business?

From the IRS’s point of view, exercise benefits you as a person, but it doesn’t benefit your business specifically. Here’s how the IRS thinks about it:

• You would likely go to the gym even if you didn’t own a business.
• Your gym membership isn’t directly tied to your business generating income.
• The benefits you’re getting from working out (better health) don’t stop when you leave work.

For these reasons, the vast majority of sole proprietors, LLC owners, and S-corp owners can’t deduct the cost of their personal gym memberships or workout classes. By the way, this is the case even if you need physical strength or stamina to perform your job and even if your doctor recommends exercise to manage your stress from work.

When might a gym or fitness expense be deductible?

Now that I’ve explained why fitness expenses are typically not deductible, let me give you some specific situations where they could be deductible. Please just remember that these are exceptions and not the rule.

Possibility #1

If you have employees, you may be able to offer fitness benefits as part of an employee wellness program. If this is done correctly, then your business can deduct the costs and your employees may not have to include these costs in their taxable income.

Examples:

• Your business pays for employee gym memberships.
• You offer on-site fitness facilities paid for by the business.
• You reimburse fitness classes as part of a documented benefit program.

Important: If you are the only employee of your business, the rules are much stricter, and you most likely can’t treat yourself the same way you would treat employees who aren’t related to you.

Possibility #2

If fitness is literally part of what you sell, then you might be able to expense it.

Examples:

• You’re a personal trainer that must pay gym fees in order to train your clients.
• You’re a martial arts instructor renting gym or studio space to hold your classes.
• You’re a fitness influencer who creates paid workout content and needs access to specific gym equipment to do so.

Important: Even in these specific situations, the expense must still be directly tied to earning income and not primarily for personal use. If the membership is used for both, you can subtract a reasonable amount that you’ve allocated to personal use from the amount you deduct as a business expense.

Possibility #3

Occasionally, you may be able to deduct fitness activities that your business is facilitating to boost employee morale or to promote team building.

Examples:

• Your business pays for a one-time group yoga class for you and your staff.
• Your business hosts a wellness day as part of a company retreat that includes workout classes and strength training.

Important: You’ll need to document these experiences and their purposes carefully in order to deduct the expenses.

Can I use my health insurance or an HSA or FSA account to pay for a gym membership or workout class?

This is where a lot of people can get confused. Gym memberships are not considered medical expenses under standard health insurance rules.

As for health savings accounts (HSAs) and flexible spending accounts (FSAs), in most cases, fitness costs are not eligible expenses using these types of funds either. An exception to this would be if a doctor prescribes exercise to treat a specific medical condition and you have proper documentation, but even if you meet those requirements, approval isn’t guaranteed.

Abridged by Amy

Taking care of your health is one of the best investments you can make, but sadly, not every good investment is a tax deduction, and that’s true in this case. Unfortunately, most small business owners can’t deduct personal gym memberships or workout classes.

However, if you think that your business’ employee wellness benefits may be deductible or if you believe your fitness expenses are directly tied to your business earnings, then make sure you consult a CPA before you attempt to take those deductions.

Fitness-related deductions often get disallowed in audits and can lead to penalties and interest, so a quick conversation with an accountant can often save you money, stress, and IRS headaches down the road.