Fringe Benefits are benefits which are additional to employee’s normal salary. So, any monetary benefit an employer offers in exchange for an employee’s services that does not include their salary is a fringe benefit. Oftentimes, employers will offer benefits based upon industry or the company itself. For example, if you work at a restaurant, you might be offered free meals. If you work at an athletic center, you might be offered free exercise classes.
Fringe benefits examples include:
- Personal use of company car
- Health insurance
- Life insurance coverage
- Retirement plans
How Fringe Benefits Work
The various fringe benefits that are provided to employees vary from one company to another, since the employer can choose the benefits that will be provided to employees during a certain period. Employees are given the chance to select the fringe benefits that they are interested in during recruitment. Whether they are interested in a company car, taking an employer-paid gym membership or education financial assistance, the employee is at liberty to take the options that provide maximum comfort at their current position in the company. With retail employers, employees may also be provided with employee discounts, gifts, and no-additional-cost services.
Although the goal of providing fringe benefits to employees is to ensure their comfort at the workplace, it also helps the company stand out for potential employees. In highly competitive markets, employers may find it challenging to retain top employees on salary alone. Fringe benefits serve as additional compensation. Providing unique fringe benefits to employees helps the company stand out from its competitors. It provides a greater opportunity to attract high value and talented employees from schools or from competing companies.
Fringe Benefit and Employee Satisfaction
- Fringe Benefit can Reduce Employee Dissatisfaction
- Tax Benefit
- Employee Engagement
- Employee Wellness
- Employee Morale