What are fringe benefits?

Fringe Benefits are additional extras, advantages, or perks that employers provide apart from what is required by law, such as standard wages or salary. Some people use the term Voluntary Benefits with the same meaning as fringe benefits.

Fringe benefits are an integral part of employment compensation packages, designed to boost employee satisfaction and loyalty.

The following definition comes from an article published by forbes.com:

“Fringe benefits are perks or extra compensation over and above regular salary. Some fringe benefits are for all the employees, whereas others are offered only to certain categories of employees.”

“For instance, the amount of paid time off an employee receives is typically directly proportional with length of employment.”

Job satisfaction

For many employees, fringe benefits are a major factor in job satisfaction and work-life balance. They often represent an important portion of an employee’s total compensation package.

For some employers, offering fringe benefits is a strategic move. It helps attract and retain talent, especially in competitive job markets.

Examples of fringe benefits

While they can vary widely between industries and individual companies, common examples include:

  • Health Insurance

Coverage for medical, dental, and vision care.

  • Retirement Plans

Contributions to retirement savings, such as 401(k) in the US, pension schemes like the Personal Pension or the Workplace Pension in the UK, Registered Retirement Savings Plan (RRSP) in Canada, Personal Retirement Savings Accounts (PRSAs) in Ireland, Superannuation in Australia, and KiwiSaver in New Zealand

Father holding up baby in the park with mother looking on - comment on fringe benefits and parental leave
Image created by Market Business News.
  • Paid Time Off

Includes vacation, sick leave, and personal days.

Provides financial protection to employees’ families in case of the employee’s death.

  • Disability Insurance

Offers income protection in case of short-term or long-term disability.

  • Employee Discounts

Reduced prices on products and services offered by the employer.

  • Tuition Reimbursement

Financial assistance for educational courses related to the employee’s job or career advancement.

Options for varied work schedules to accommodate personal needs.

Ability to work from home or other locations outside the office.

  • Childcare Assistance

Support for childcare expenses or on-site childcare services.

  • Gym Memberships or Wellness Programs

Contributions towards gym memberships or programs to encourage health and wellness.

  • Transportation Benefits

Compensation for commuting costs, such as transit passes or parking fees.

  • Professional Development

Opportunities for training, workshops, and conferences to enhance skills and career growth.

  • Company Car

The employer provides a vehicle for personal and/or professional use, often including the cost of insurance, maintenance, and fuel.

Conclusion

Fringe benefits are a crucial component of employment that goes beyond the paycheck. They contribute to employees’ overall bell-being, offering support in financial planning, health, and personal growth.

Video – What is a Perk?

This educational video, from our sister channel in YouTube – Marketing Business Network, explains what the term “Perk” means using easy-to-understand vocabulary and examples.