What are Fringe Benefits?
Fringe benefits refer to supplementary benefits that employees receive in addition to their regular salary. They include both common benefits, like health insurance and workers’ compensation, as well as less common benefits, such as paid vacation and meal subsidization.
Why offer Fringe Benefits?
Companies typically offer a combination of fringe benefits to attract new employees and retain existing ones. While some fringe benefits are essential to employee satisfaction, such as health insurance, others are not considered necessary for an employee’s well-being, such as paid vacation. However, offering such benefits can boost employee satisfaction and potentially improve performance. It is important to note that not all fringe benefits are tax-free. The IRS provides a list of tax-free benefits, while all other benefits are subject to taxation.