FRINGE BENEFITS EXAM

1. Which of the following is NOT considered a fringe benefit?

a) Paid time off

b) Health insurance

c) Direct wages

d) Retirement plans

2. Which of the following is an example of a statutory fringe benefit?

a) Company-provided car

b) Paid vacation days

c) Social Security contributions

d) Gym membership subsidy

3. Fringe benefits are typically provided to employees:

a) As a substitute for their salary

b) In addition to their salary

c) As a lump sum payment at the end of the year

d) Only to top-level executives

4. Which of the following is a characteristic of a qualified fringe benefit?

a) It is fully taxable to the employee

b) It is not subject to any tax regulations

c) It meets specific IRS criteria for preferential tax treatment

d) It can only be provided to non-US citizens

5. Which type of fringe benefit allows employees to set aside pre-tax dollars to pay for eligible expenses?

a) Flexible spending account (FSA)

b) Health savings account (HSA)

 c) Stock options

d) Life insurance coverage

6. Which federal law regulates the provision of fringe benefits such as health insurance and retirement
plans?

a) Fair Labor Standards Act (FLSA)

b) Employee Retirement Income Security Act (ERISA)

c) Americans with Disabilities Act (ADA)

d) Family and Medical Leave Act (FMLA)

7. Which of the following fringe benefits is typically NOT subject to payroll taxes?

a) Health insurance premiums paid by the employer

b) Company car for business and personal use

c) Educational assistance programs

d) Employee discounts on company products

8. Which fringe benefit is commonly used by employers to encourage employees to save for retirement?

a) Commuting subsidies

b) Educational assistance programs

c) 401(k) plans

d) Paid parental leave

9. Which of the following fringe benefits must be reported on an employee's W-2 form?

a) Discounts on company products

b) Group-term life insurance coverage exceeding $50,000

c) Tuition reimbursement for job-related courses

d) On-site fitness center access

10. Fringe benefits are often used by employers as a tool for:

 a) Reducing employee morale

b) Enhancing employee compensation packages

c) Increasing turnover rates

d) Avoiding legal obligations

Answers:

1. c) Direct wages

2. c) Social Security contributions

3. b) In addition to their salary

4. c) It meets specific IRS criteria for preferential tax treatment

5. a) Flexible spending account (FSA)

6. b) Employee Retirement Income Security Act (ERISA)

7. c) Educational assistance programs

8. c) 401(k) plans

9. b) Group-term life insurance coverage exceeding $50,000

10. b) Enhancing employee compensation packages