fringe benefits

fringe benefits and employer benefits in form include different kinds of non-wage compensations offered to employees as well as their regular wages or salaries. Such instances where an employee trades wages for any other type of bonus is commonly known as a “Salary exchange or salary packing.” The practice of offering non-wages and other benefits for employees usually come into play when an organization encounters a need to retain employees, when it comes to a merger or acquisition, or when the economy is facing financial problems. In most cases, companies that provide fringe benefits to employees work with insurance carriers. The practice is not allowed under most employment contracts, although fringe benefit plans are becoming more common especially in the business-to-business sector.

The benefits offered by employers are also known as employer retirement plans. Usually, benefits are given outside of regular workplace pay but this is dependent on an employee’s choice. Employees can choose to receive any form of retirement benefit as long as this does not conflict with their salary. Benefits offered may include pensions, 401(k) s, employer sponsored insurance plans, life insurance, and healthcare benefits. Other types of fringe benefits that employers give include travel expenses to meetings, discounted lunches, and car rentals. It should be kept in mind, however, that travel expenses are not tax deductible.

Fringe benefits also cover benefits such as medical coverage, accident assistance, maternity leave, death benefits, critical illness coverage, disability income, family leave, health insurance, and life insurance. When these types of benefits are provided by an employer, the employee is considered a full-time employee for the purposes of tax considerations. Full-time employees are those who are hired for at least one year or more. These include office staff, contractual workers such as security guards, warehouse workers, and janitors.

The tax treatment of fringe benefits for employees varies by country. In the United States, these benefits are not taxable. However, employees cannot deduct any expense above the limit which is determined by regulations. If benefits are allowed to be deducted, they must be used for work related purposes and only after deduction of all other applicable deductions.

Providing fringe benefits has become a controversial topic in the United States. Many employee unions have fought against these benefits, claiming that they are intended to allow employees to obtain raises and promotions at the expense of their own livelihood. The US Department of Labor has maintained that there is no evidence to prove that employees have been disrespected due to these benefits. Many states have laws which limit the total amount of these benefits an employee can receive. For this reason, many employers and unions offer employees lifetime employment and substantial raises and perks.

There are several opinions on the subject. Some experts believe that companies should not offer any fringe benefits to employees. These benefits may only be offered to those who are hardworking and contribute significantly to the company. Other experts believe that these benefits are necessary in order to attract and retain quality employees. If one believes that employee benefits provide an employee with a significant financial security, they may consider the debate between tax treatment and fringe benefits to be irrelevant.