Aside from the salary that comes with your new job, what else does your company have to offer? Most employees or job hunters know to be on the lookout for health insurance, flexible spending accounts and 401k matching, but depending on the role, your job may also provide additional advantages.
These benefits are all fringe benefits, which are forms of pay for the performance of services. Typically, fringe benefits are not included as a part of an employee’s annual salary. Once an offer of employment is made, companies will share information about these benefits and special programs in order to showcase all of the perks that come with their offered role.
Sometimes, excellent benefits can make up for a salary that is slightly lower than expected as they often reduce expenses in other areas and help to make life inside and outside of the office more comfortable.
Other than health insurance and retirement funds, some popular fringe benefits include gym memberships, access to company cars, and employer-paid life insurance. Free meals, housing stipends, tuition reimbursement and on-site childcare are other common types of fringe benefits.
While these perks are a plus, not all of them are required. Some fringe benefits are mandated by law and most employers, with the exception of some small business owners, are expected to provide them. Health insurance for instance, is a required benefit for employers with more than 50 employees. Additionally, Workers’ Compensation Insurance, Social Security and Medicare are all required and must be covered by employers.
Fringe benefits typically do not count as additional income. Since these benefits usually come in some sort of service or product, rather than additional money added to each paycheck, employers regard them as separate and not as a part of your annual income.
The free meals you receive, discounts on gym memberships and housing stipend may not all be subject to federal income tax. Most perks are tax free but if you’re ever unsure of whether your company perks are taxable, you can double check on the IRS webpage dedicated to fringe benefits.
Whether or not you have to pay for fringe benefits depends on the benefit itself. Some benefits may come completely free of charge such as paid vacation, free meals or on-site childcare, but others like health insurance or a gym membership might be partially subsidized with the expectation that the employee will make up the difference.
The total amount that the employee has to pay for these perks vary based on the company but it is typically far less expensive than the rate offered independent of employment. Other services, like a per diem for meals might have a budget or a cap. For instance, while traveling for business purposes, your company or organization might offer to cover up to $20 per meal. In effect, if you yield to the budget, the company will cover the entire cost of the meal however, surpassing that threshold means that you will likely have to pay the difference.
Employees and those on the job hunt expect some sort of benefits package; the more competitive a company's offer, the better chance at attracting, and retaining, employees.
When your company treats you well, you’re more inclined to put your best foot forward and work hard. Fringe benefits incentivize employees to stay with their company and to live balanced lives outside of the office.
If you work in a stressful environment, a place with short deadlines or long hours, it might be helpful to have extra perks that make your day easier. It is a lot more reassuring to work that memo all evening knowing that you have emergency childcare after hours or when your child gets out of school. Free meals can also be a perk as it cuts down time spent cooking and meal prepping and you can spend your time out of the office doing more enjoyable activities.
Sometimes fringe benefits afford us realities we would’ve otherwise missed out on if we didn’t have them. A reduced priced gym membership can allow you to get into better shape than you’ve been in before and corporate perks can score you big discounts on your next family vacation.
While it might seem costly to provide additional services to employees, these benefits make the job more worthwhile and enjoyable for the employees. Companies that offer excellent benefits often become well-known for them and it can be a great tool when recruiting new workers. Next time you’re on the hunt for a new job or when you feel bold enough to ask for your promotion, be sure to keep fringe benefits in mind because in a unique way, they’re just as important as the salary you’ll receive.
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