What is a fringe benefit if we may ask? A fringe benefit is also known as an employee benefit and it can be considered as an extra benefit supplementing an employee’s salary. But where are the fringe benefits concerned? It is not quite as simple as it may seem in reality. To be precise, the benefits are collected on different perks that are provided by the employer and they are not liable to taxation upon meeting some conditions. In case an employee receives a taxable fringe benefit, they will have to include it in their fair market value as part of their taxable income for the year and this is what makes that subject to tax withholding and social security benefits.
There are various ways in which one can get the fringe benefits. You may have some family members or friends that receive education reimbursement from work, drive company vehicles and also get child care assistance reimbursement. You may be wondering what makes them get such benefits. These are just but as a result of fringe benefits. There are other classic fringe benefits that one can get such as healthcare plans, paid vacations, cafeteria plans, and group-term life coverage and employee discounts.
There are times when the employer may decide to offer different benefits altogether. In such a case, this is referred to as a fringe benefit package. The packages come to get better with time-based on the employee’s loyalty and in case an employee improves skills and knowledge for use at the workplace. As changes are made, this can increase or decrease over time as a result of the company firing or laying off its employees or when the company goes a major shift in management. For those that are already within the plan, the benefits increase with time although this rarely happens. When you are an employee in a certain company, you can check on the rules and regulations that are associated with these benefits.
Some of the employee benefits have been in existence for a good period of time such that they are not just a standard but expected. The benefits are very important in getting along socioeconomically. There are other minor benefits that may be taken lightly but they have a lot of impact in rewarding the employees and maintaining their loyalty. Such include; sick leave, Christmas bonuses, vacation time and offering of medical coverage. At some points, employee pension may fall under this category. One important thing that you need to know concerning these offers is that the compensations will no longer be fringe benefits if the employee payments are required by the law. Therefore, some employees will count certain standard perks as fringe benefits while others cannot depend on the location and different rules and regulations.
The main reason for giving such benefits is to help the employees become more financially stable and increase their economic security in turn. It is also the best way that a company can use to retain its valuable staff.