Fringe benefits are perks that organizations give to their workers above and beyond financial compensation. As the years fly by, we find that fringe benefits have become more and more important to the workforce. A lot of employers are taking advantage of fringe benefits that appeal to more than one demographic.
One trend is offering work-at-home options to employees who are raising children. Another is offering on-site wellness centers at work to help employees stay on track with their health goals. Employers are also considering ways to provide additional services and benefits for employees in consideration of the fact that millennials (or Generation Y) will make up 50% of the workforce by 2020.
In this article, we will discuss some of the tax-free fringe benefits.
Insurance Coverage
Insurance coverage is among the most common fringe benefits given to employees. Typically, organizations offer up to $50,000 of long-term and short-term disability coverage, group term life insurance, and health insurance options. Organizations usually share the cost of rewards with workers in an effort to balance the total cost to the worker.
Dependent Assistance
Another fringe benefit offered through some employers is child care assistance. Working full-time with kids can exhibit scheduling conflicts and restrictive daycare expenses. Some organizations offer workers dependent care in the worksite, either at a low cost or for free. Smaller organizations may present a monthly bonus to workers for the specific objective of paying for dependent care. Also, some organizations can give dependent benefits to workers by enabling them to contribute to a program on a pretax foundation. The IRS (Internal Revenue Service) empowers individuals who file tax returns distinctly to provide up to $2,500 per year, and married couples can jointly contribute a maximum of $5,000 every year. Employers can use this to pay for dependent expenses like childcare, along with elderly relatives who can not take care of themselves.
Retirement Plan Contributions
Making contributions to a qualified retirement plan is considered one of the most valuable benefits an employer can offer. It is also the most common and probably the most beneficial. Some organizations offer matches on worker paycheck deferrals, while others obtain qualified contributions to retirement programs without requiring workers to make contributions on themselves. These strategies can be compelling tools in saving for the long run and give compensation to workers above and beyond their wages.
Bonus Compensation
Along with your salary and nonfinancial perks, employees may be authorized to bonus rewards. This is a monetary citation that is above and beyond anything that the organization provides. Most of the organizations pay bonuses at the year-end, while some even present new employees with a signing bonus when they are first recruited.
Final Words
In a job, remember not to be stupefied by how much you are being paid. While the take-home pay is a very significant consideration, you should be aware of the other perks that the organization offers you.
To know more about Fringe benefits, attend the Compliance Prime webinar.
