Broker Check

Fringe Benefits Basics

| April 18, 2023

    There was a major problem going on in the U.S. during World War II outside of the war, and that was inflation. Factories that were once producing goods were now producing equipment for the war. Because of this the goods that were being made at these factories were harder to come by. Fringe benefits received their name because they were “on the fringe” of cash benefits. These were things like paid vacations and pensions. Since the start of fringe benefits, they have really evolved. Perks like private parking, company jet, shuttles or limo services, and memberships can now even be expected by some employees. 

     These benefits seem to always be evolving. According to the US bureau of Labor Statistics more than 50% of the workforce is made of women and because of this childcare, remote working, and maternity leave have become popular. For the younger working force benefits like paternity leave and wellbeing classes have been on the rise.  

     Fringe benefits can either be taxable or non-taxable. According to the IRS, any fringe benefit that you provide is taxable and must be included in the recipients pay unless the law specifically excludes it. 

     I believe the most important fringe benefit to every employee is group medical insurance. Medical insurance is expensive, so any contribution from your employer to help offset that cost is a win for the employee. It can also be a win for the employer. When employees have health insurance, most of the plans have preventative care. When the employee takes advantage of preventative care it can keep that employee healthy and at work, not calling out sick. It can also help with diagnosing serious illnesses before they get too bad and keep the employee out of work for extended periods of time.  

     In my opinion the second most popular benefit is some type of retirement plan. Whether it be a 401(k) or a pension, most employees are looking for a contribution toward retirement. Financial wellbeing is important to employees, especially with inflation. Offering retirement plans can also be beneficial to the employer as well, not just with recruiting and retaining employees, but with possible tax advantages as well. 

     It doesn’t matter what industry you’re in, your employees want to feel appreciated. Offering fringe benefits can be a way to show you current and future employees that you care. It can also help them to stay with your company. 

     To learn more about different fringe benefits and options, please feel free to contact Keaney Financial Services Corp. anytime with your questions.