What is Fringe Benefits?
Fringe benefits are the benefits not covered by a standard pay package.
Benefits such as vacation time, health insurance, and other perks that an employee is not typically compensated for are fringe benefits.
A fringe benefit is a benefit that is usually paid to an employee, often in addition to salaries and other compensation and is considered to be outside the normal scope of employment.
Employees may receive fringe benefits such as discounts on retail products, subsidized meals, or child care.
Fringe benefits are often necessary in order to attract and retain employees. In many cases, they can be the deciding factor between two candidates for a position. They can also help to improve employee morale and motivation.
Fringe Benefits Tax
Are fringe benefits taxable? Sometimes, All other benefits are subject to tax.
Here are some examples of tax-free benefits:
- Accident and health benefits
- Achievement awards
- Adoption assistance
- Athletic facilities
- De minimis benefits (small perks like free coffee)
- Dependent care assistance
- Educational assistance
- Employee discounts
- Employee stock options
- Employer-provided cell phones
- Group-term life insurance coverage
- Health savings accounts
- Lodging on business premises
- No-additional-cost services
- Retirement planning services
- Transportation (commuting benefits)
- Tuition reduction
- Working condition benefits