What Is A Fringe Benefit?
A fringe benefit is a work-related perk that is not in an employee's salary or wage. These condition benefits may include company-sponsored health insurance, retirement plan matching contributions, tuition reimbursement programs, and more.
Core Benefits Of Fringe Benefits
While each business will have its preferred types of employee fringe benefits (if any at all), let's look at a commonly enjoyed list of fringe benefits outside of employee taxable income.
Studies show that healthcare costs are the number one cause of personal bankruptcy in the United States. By providing employees with a company-sponsored healthcare plan, you can help them maintain their family's financial stability and health benefits.
It might shock you to learn how many workers do not have health insurance in the United States alone. Companies that provide health insurance as non-taxable fringe benefits like long-term care insurance for their employees do them a commendable service.
Retirement Plan Contributions
Employees need to have enough funds saved for retirement, and studies show that 401(k) contributions alone will not be sufficient by 2050. Providing your staff members with matching donations on a retirement account means they'll have more money when it comes time to retire.
Tuition Reimbursement Programs
Suppose you're an employer who offers tuition reimbursement programs as part of your employee fringe benefits. In that case, this tuition reduction is something to seriously consider if competitiveness or retention rates are important factors for success within your business.
Non-taxable fringe benefits increase the productivity and efficiency of your workforce. They're able to stay healthy, focus on their work more intently, and can also find success through a career with you that is fulfilling both personally and financially.
As an employer who offers fringe benefits as part of the employment package, these perks must provide financial stability for your employees and for yourself to ensure retention rates or competitiveness within the business sector.
This performance of services involves a business owner offering enough incentives for their employees to feel valued at work. Providing financial benefits to employees increases productivity due to less stress outside of office hours.
Employees who commute to their business premises using public transportation daily would benefit greatly from a bit of help getting around. Taxi, bus, or train fares can start to add up and drain an employee's salary, especially when you consider what is also due to the Internal Revenue Service.
One excellent fringe benefit would be a business vehicle that ferries employees that rely on public transportation to and from their homes. This company vehicle could act as a local shuttle so that employees can arrive promptly and safely to work daily.
These benefits are an essential part of the employment package. They may also include employee discounts, a great retirement plan, various assistance programs, adoption assistance, pension plans, and athletic facilities.
Advantages Of Fringe Benefits
A fringe benefit is an additional way to offer your staff members the sense of security they need. Every day, people struggle to find employment, and some end up scraping by on part-time jobs that don't provide enough benefits, like group-term life insurance coverage or stability.