There are many types of benefits that are offered by the employer to the employee. Fringe benefits are one of the popular type of benefits that are offered to the employee these days. We will be exploring about fringe benefits in detail in this article ahead. Stay hooked!
What Are Fringe Benefits?
Fringe benefits are monetary rewards or compensations that are offered to the employees. These are rewards or prizes that are awarded to the customers as a token of appreciation and are in monetary form. Even of the benefits are offered in any other way than cash, the reward will be cashable immediately.
Are Fringe Benefits Equivalent To Normal Employee Pay Rate?
The one thing that is often confusing and hard to understand for people is whether the fringe benefits are equivalent to the normal pay rate of the employee or not. It is not equal to the normal pay but is always higher. Since it is an occasional reward that is being offered to the employees with a purpose to encourage them to work more efficiently – the benefits offered are higher in monetary value.
Are Fringe Benefits Exempted From Tax?
Although most of the times fringe benefits are excused form taxes but there are certain rewards that make it mandatory for tax payments on them to be made. These are the types of benefits that will be included in the annual income tax report and you will have to pay the tax that is applicable on it.
Examples Of Fringe Benefits
Here are some examples of fringe benefits that are commonly awarded to the employees by the organization or employer they work for.
1. Transportation Benefits
Most companies offer transportation benefits are rewards to the employees. This includes waiving off traveling fares on public transport and providing free of cost petrol or diesel supply for cars or bikes. Transportation benefits also offers gift cars or other vehicles as rewards to the employees.
2. Income Bonuses
Another popular example and much loved too by the employees of fringe benefits are income bonuses. You may get bonus on your income i.e. in form of increase in pay rate or monthly/yearly bonus that is a large fraction of your income.
3. Flexible Working Hours
A worthy fringe benefit is you being paid for 8 hours of working when you only have to work 5 hours a day.
4. Complimentary Holiday Or Membership Plans
As a reward, you can be offered a holiday trip to some exotic location, all-paid by the company. You can also get membership plans to high-end resorts and gymkhana clubs.
5. Insurance And Retirement Plans
Some companies offer extensive and comprehensive retirement and insurance plans to the employees. This is a long-term benefit for the employees and is only awarded as a larger reward.
6. Miscellaneous Rewards
Companies might also offer small prizes to the employees to appreciate them and keep them motivated to work even better for bigger rewards. This includes gift hampers like laptops, mobile phones or other miscellaneous goodies.