What Does Fringe Benefits Mean?

Fringe benefits that employers offer can encompass a variety of different things—just as Fladger Associates! Fringe benefits are extra ones on top of an employee's regular benefits. For example, a health insurance plan for an employee is a normal benefit that is provided through most job positions, while the use of a company car is considered a fringe benefit. Some pension plans from an employer are also considered fringe benefits since some are way more lucrative than others.

What Do Fringe Benefits Mean?

Fringe benefits are additional benefits that employees receive on top of their normal salary and more common benefits. They are designed to enhance the overall employment package to attract and retain high-quality employees. Fringe benefits include health insurance, life insurance, childcare reimbursement, tuition assistance, personal use of company vehicles, gym memberships, transportation services, and achievement awards. These benefits can assist companies with recruiting and motivating employees and can even increase the employees' satisfaction overall. This helps companies when it comes to employee retention. There are many costs associated with training new employees, so it is very beneficial for companies to retain their existing employees.

A fringe benefit is the type of payment for the level of performance of services that an employee is expected to give to a company. For instance, a fringe benefit can be a company car for employees to commute to and from work or drive during work hours. Some employers will even give a car to certain employees who need it for work, but they can also use it when they are off the clock.

Fringe benefits are designed to enhance the overall employment package to attract good, quality employees to a company. These fringe benefits are in addition to the employee's base salary. Some fringe benefits are given to all employees of a company or business, while others may only be available for employees at higher levels within the company. Some fringe benefits are offered to award employees as compensation for costs that they have incurred related to their job or are created to enhance the workers' overall job satisfaction. This helps companies retain good, quality employees since the employees will be happier it may not want to look elsewhere for a job.

Some Fringe Benefits Are Tax Exempt

Some fringe benefits may be tax-exempt, while others may be taxed at fair market value. For example, a health insurance policy is normally exempt from tax, while a company’s cash award to an employee will have to be taxed.

According to the Internal Revenue Service (IRS), many fringe benefits are exempt from taxes. Those include:

• Accident and health benefits
• Commuting benefits, including taxi fares and bus fees
• Use of Athletic facilities
• Achievement awards (up to $1,600 for qualified awards)
• Adoption assistance
• Tuition reduction or reimbursement
• Dependent care assistance
• Educational assistance
• Employee discounts
• Employee stock options
• Employer-provided cell phones
• Health savings accounts (HSA)
• Group-term life insurance coverage
• Meals
• Lodgings on business premises
• No-additional-cost services
• Retirement planning services
• Working conditions benefits

Remember, though, that certain conditions and criteria must be followed for these things to be tax-exempt. For instance, some employers will offer lifetime achievement awards to their employees. Some achievement awards are exempt from being taxed, but they must meet certain criteria. This means the award must be worth less than $1,600 and cannot be given to the employee in cash, gift certificates, or even gift cards. This type of award cannot be in the form of bonds, stocks, or other securities, or it must be taxed. Tickets to sporting events, theater tickets, amusement park tickets, lodging at hotels, meals while you travel, and vacations are exempt from being taxed when given as gifts.

Fringe Benefits Help Companies and Employees

Not only do fringe benefits help out employees, but they also help employers. For instance, if an employer has a huge turnover of employees, a lot of time and money is wasted on constantly training with new employment opportunities. By offering higher pay along with fringe benefits, employers can attract more employees to apply to work at their company and keep them once they do. For example, if an employee is issued a free-of-charge cell phone that they can use for business and personal use, they may not look for another job since it would incur a monthly phone bill. Also, if an employee has full access to a company truck or car, they may not want to move on to a different company that won't offer them the same deal. This allows companies to retain high-quality employees and keep their businesses running smoothly and efficiently.

Fringe benefits increase employee satisfaction in most cases. Most employees view health insurance as necessary, so providing it as a fringe benefit is silly because most employees expect it, and they should. Other fringe benefits, such as using a company car or cell phone, can increase employees' satisfaction tremendously. This means they will do a better job while they are at work and be more productive. This also means that since they are more satisfied with their job duties, they will likely stay at the company much longer than they would have otherwise.

Apply for a Job with Fringe Benefits

If you are searching for a job that pays well and has nice fringe benefits, contact the employment specialists at Fladger Associates. They can assist you in finding a great job based on your skills and knowledge. Call upon the employment professionals at Fladger Associates today and be on your way to a new career! Contact us now.