FRINGE BENEFITS

MEANING
Fringe benefits are the additional benefits
offered to an employee, above the stated
salary for the performance of a specific
service.
an extra benefit supplementing an
employee's money wage or salary, for
example a company car, private healthcare,
etc.
They can be statutory or voluntary.
 example– provident fund ,health insurance are
statutory benefit whereas transportation, lunch,
gym membership, employee stock
options,child-care are voluntary benefit.
. One of the advantages of fringe benefits is that
they are tax-exempt for the employer, but the
recipients of fringe benefits are required to
include the fair value of the benefits in their
annual taxable income.
How fringe benefits works
The various fringe benefits that are provided to employees
vary from one company to another, since the employer can
choose the benefits that will be provided to employees
during a certain period. Employees are given the chance to
select the fringe benefits that they are interested in during 
recruitment.
Although the goal of providing fringe benefits to
employees is to ensure their comfort at the workplace, it
also helps the company stand out for potential employees.
In highly competitive markets, employers may find it
challenging to retain top employees on salary alone. Fringe
benefits serve as additional compensation.
Types of Benefits

1. Fringe benefits required by law---

 Health insurance
It requires businesses that employ more than 50 people to provide
healthcare plans, and employees are required to have health insurance
coverage. The health care plans cover visits to primary care physicians,
specialist doctors, and emergency care.

Unemployment insurance
The Federal Unemployment Tax Act (FUTA)  requires employers to pay
a federal and state unemployment tax to the Department of Labor, which
provides wages, training, and career guidance to employees who become
unemployed due to no fault of their own. Such benefits are meant to
provide brief monetary assistance to unemployed citizens who meet the
requirements of the act.
Medical leave
Businesses that employ over 50 employees are required by
law to provide family and medical leave to an employee who
has worked for over one year in the company. The medical
leave is protected, and can last up to 12 weeks.
Worker’s compensation
The worker’s compensation benefit is administered by the 
Department of Labor to federal workers who are injured at
their workstation or acquire an occupational disease.
Employees are provided with medical treatment, wage
replacement benefits, and other benefits. The compensation
requirements vary by state, and injured employees should
contact their state worker’s compensation board.
2. Fringe benefits not required by law

Paid holidays
Accommodation/Housing
Education reduction
Transportation/Car by Company
Stock options
Paid time off
Cafeteria plans
Achievement awards
Fitness training
Employee discounts
Meal plans
Retirement planning services
 life insurance
Why Employers Offer Fringe Benefits
How to calculate fringe benefits
Fringe rate = (Total fringe benefits/Annual wages) X 100.
Total fringe benefits: This is the total cost of all the
non-wage benefits given to the  employee throughout
the year.
Annual wages: This includes the total salary the
employee draws that year.
Example-- For example, if the total fringe benefits are
valued at $20,000 and the employee’s annual wages are
$100,000, the fringe benefit rate would be:
($20,000/$100,000) X 100 = 20%
Thank you