Shweta is an author and freelance writer. She writes about technology and small businesses. Her writing has also appeared in News Week and Huffington Post.
Cassie is a deputy editor, collaborating with teams around the world while living in the beautiful hills of Kentucky. She is passionate about economic development and is on the board of two non-profit organizations seeking to revitalize her former railroad town. Prior to joining the team at Forbes Advisor, Cassie was a Content Operations Manager and Copywriting Manager at Fit Small Business.
Shweta,Shweta is an author and freelance writer. She writes about technology and small businesses. Her writing has also appeared in News Week and Huffington Post.
Cassie BottorffCassie is a deputy editor, collaborating with teams around the world while living in the beautiful hills of Kentucky. She is passionate about economic development and is on the board of two non-profit organizations seeking to revitalize her former railroad town. Prior to joining the team at Forbes Advisor, Cassie was a Content Operations Manager and Copywriting Manager at Fit Small Business.
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Jane Haskins practiced law for 20 years, representing small businesses in startup, dissolution, business transactions and litigation. She has written hundreds of articles on legal, intellectual property and tax issues affecting small businesses.
Jane HaskinsJane Haskins practiced law for 20 years, representing small businesses in startup, dissolution, business transactions and litigation. She has written hundreds of articles on legal, intellectual property and tax issues affecting small businesses.
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Employers pay fringe benefits, also known as voluntary benefits, to their employees as a supplement to their regular salary. Fringe benefits can be used as an effective tool to attract, recruit, motivate and retain a high-quality workforce. They may be taxable or nontaxable. In this article, we will discuss fringe benefits, their examples and benefits.
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Fringe Benefits DefinedFringe benefits are perks or extra compensation over and above regular salary. Some fringe benefits are for all the employees, whereas others are offered only to certain categories of employees. For instance, the amount of paid time off an employee receives is typically directly proportional with length of employment.
Most fringe benefits are taxable at fair market value but some benefits, such as health and life insurance, are nontaxable. As an employer you can choose to estimate total annual taxes payable by the employee and distribute it over every paycheck. Or, you can choose to deduct, collect and pay taxes once a year.
If you do not have enough HCM capabilities in-house, a Professional Employer Organization (PEO) can help manage fringe benefits for your employees.
Examples of Fringe BenefitsThere are some fringe benefits that are almost mandatory because the employees expect them. If you don’t provide these benefits, you will find it difficult to hire and retain good employees.
In addition, you may choose to provide unique fringe benefits to attract good employees. You must choose benefits that are used by the employees and do not end up draining your resources in the long run.
Required Fringe BenefitsThese are some fringe benefits you generally must provide to your employees:
- Health Insurance: If you employ less than 50 full time employees, it is not mandatory to provide health insurance under the ACA. However, this is a fringe benefit that you should consider providing to all your employees because individual medical coverage can be expensive and employees expect to have this covered by their employer.
- Workers’ Compensation: Workers’ compensation is insurance that covers lost wages, medical expenses and rehabilitation costs for employees that have fallen sick or gotten injured on the job. It also includes death benefits to the next of kin of employees killed on the job. Most businesses with employees are required to have workers’ compensation insurance.
- Family and Medical Leave: The Family and Medical Leave Act (FMLA) requires employers to provide employees up to 12 weeks of unpaid leave of absence for a serious medical condition, or to care for a newborn or family member. Group health benefits continue during this period. The FMLA applies to companies that employ more than 50 employees within a 75-mile radius.
Optional Fringe BenefitsThese are some additional fringe benefits you can choose to provide:
- Retirement Plans: You can set up a 401k plan that allows your employees to start investing into their retirement plan through payroll deductions. This has benefits for your business as well because any matching contributions you make are tax deductible.
- Paid Vacation: You can allow your employees to take paid time off (PTO) work to deal with health emergencies or go on vacation to recharge themselves. Since this is not mandatory under the FLSA, paid time off depends only upon the agreement between you and your employee.
- Gym memberships: Providing gym memberships to employees is an easy way to demonstrate that you care about the health and well being of your employees.
- Meal subsidy: If you have cost-effective numbers, you can have an in-house cafeteria. Otherwise, you can provide coupons or vouchers redeemable at local restaurants.
- Commuter Benefits: Under the IRS rules, employers may provide tax-free transportation benefits to their employees. The transportation that qualifies for benefits includes public transit, vanpooling, bicycling and parking.
- Employee Stock Ownership Plan (ESOP): Distributing stock ownership to employees according to their payscale, grade and range of responsibilities can help you attract capable employees. You must consult your legal as well as finance and accounting teams for framing the rules and regulations for distributing ESOPs.
Benefits of Offering Fringe BenefitsEmployees feel valued if they are provided excellent benefits packages. These are some of the benefits of offering fringe benefits to your employees:
- Attract top talent. Generous fringe benefits can help you attract talented and competent job candidates.
- Keep employees motivated. Offering fringe benefits makes employees feel valued, which can keep them motivated and highly productive.
- Improve loyalty and employee satisfaction. Fringe benefits demonstrate to the employees that you care for them, improving employee satisfaction and loyalty.
- Ensure good health of employees. If employees are unable to work due to ill-health or injuries, business suffers. So it makes sense to offer benefits that ensure excellent employee health.
- Reduce employee turnover. When employees feel motivated and valued, get appropriate remuneration for all the hard work they put in, and are satisfied with their work as well as compensation, they have no reason to leave the organization.
Are Fringe Benefits Taxable?By default all fringe benefits are taxable unless they are explicitly exempted from taxation as per the Employer’s Tax Guide to Fringe Benefits. The employee must include the fair price value of the benefits in their taxable income for the corresponding year. The fair price value of a fringe benefit is its market price in the open market.
The IRS maintains a list of fringe benefits that are exempt from taxation. These are:
- Accident and health benefits
- Achievement awards
- Adoption assistance
- Athletic facilities
- De minimis (minimal) benefits
- Dependent care assistance
- Educational assistance
- Employee discounts
- Employee stock options
- Employer-provided cellphones
- Group-term life insurance coverage
- Health savings accounts (HSAs)
- Lodging on your business premises
- Meals
- No-additional-cost services
- Retirement planning services
- Transportation (commuting) benefits
- Tuition reduction
- Working conditions benefits
These are not fully exempted; many rules and regulations govern the exemption. You should take legal counsel from a competent lawyer before committing to anything.
Bottom LineIf you operate in a highly competitive industry where a skilled workforce is in high demand, offering an innovative and useful fringe benefits package can be the key to attracting strong talent.
Frequently Asked Questions (FAQs) What are examples of fringe benefits?The most common examples of fringe benefits include health insurance, retirement plans, workers competition, family and medical leave, paid vacation time and commuter benefits.
What is the meaning of a fringe benefit?Compensation over and above an employee’s direct wages or salaries is called a fringe benefit. This may be monetary in terms of bonuses and allowances or nonmonetary, such as subsidized meals, paid holidays and pension plans.
Why do employers offer fringe benefits?Fringe benefits enable businesses to attract, recruit, motivate and retain highly skilled employees. Fringe benefits also result in increased loyalty and satisfaction among employees, thereby decreasing the turnover rate.
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Shweta is an author and freelance writer. She writes about technology and small businesses. Her writing has also appeared in NewsWeek and Huffington Post.
Cassie is a deputy editor, collaborating with teams around the world while living in the beautiful hills of Kentucky. She is passionate about economic development and is on the board of two non-profit organizations seeking to revitalize her former railroad town. Prior to joining the team at Forbes Advisor, Cassie was a Content Operations Manager and Copywriting Manager at Fit Small Business.
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Hunter Biden to plead not guilty to firearms charges
Hunter Biden will plead not guilty to federal firearms charges filed after the collapse of a plea deal in a long-running federal investigation, his lawyers said Tuesday in court documents.
Biden is accused of lying about his drug use when he bought a firearm in October 2018, during a period when he has acknowledged struggling with addiction to crack cocaine. He is accused of keeping the gun for 11 days.
The three-count indictment from a special counsel overseeing the case came weeks after the proposed plea deal and puts the case on track toward a possible high-stakes trial as the 2024 election looms.
He is asking to enter the plea remotely via video conference, saying that would avoid the costs of Secret Service protection as he travels from his home in California to Delaware, as well as logistical challenges in Wilmington. Prosecutors are expected to oppose that request.
Hunter Biden has also been under investigation for his business dealings, and the special counsel has indicated that tax charges could be filed at some point in Washington or in California, where he lives.
Employee Benefits
This page is intended for current UW employees, new employees please review the New Employee – Information and Onboarding webpage.
Your benefits are an important part of your overall compensation package, and the University of Wyoming is pleased to offer benefits-eligible employees a comprehensive array of benefits. These benefits are designed to help protect and enhance the overall well-being and way of life for you and all eligible family members. Your robust benefits package can include medical, dental and vision insurance, retirement accounts, life insurance, short and long term disability insurance, wellness programs, and mental health support, among others. Some benefits are provided automatically and at no cost to you, while others will require your enrollment. Take time to familiarize yourself with what’s available and the coverage options. When it comes to your health and wellbeing, we understand “one size” does not fit all. That’s why the University of Wyoming offers a variety of coverage levels and rates, providing employees the flexibility to choose the plan(s) that are best suited for their needs and the needs of their eligible family members. Questions? Contact our Benefits Team using the information outlined below.
The Affordable Care Act (ACA) requires that the University of Wyoming provide its employees who are eligible for health insurance with the following information: New Health Insurance Marketplace Coverage Options and Your Health Coverage Notice. You may not be eligible for a subsidy as described in this Notice because the State of Wyoming plan meets the standards set by the ACA.