Flash News NA 10/26/2023
Fringe Benefits – Types and Advantages

Fringe benefits are compensation supplements that companies offer their employees. Some benefits are granted to all employees, while others may be available only to those in certain positions. Additionally, some benefits are granted to compensate employees for the costs associated with performing their duties, while others are geared toward overall job satisfaction.
In any case, employers use fringe benefits as a tool for recruiting, motivating, and retaining employees.

In today’s job market, especially in some professional fields, workers are highly qualified and have greater choice over their career path and the organization to which they choose to dedicate their skills. When making a decision about their professional future, and in cases where salaries are similar across companies in the same industry, flexible benefits can become a differentiating factor.

Aware of this reality, many companies have expanded their fringe benefits, now offering a very diverse range of benefits.

In addition to their annual salary, employees who receive certain benefits can not only save money on certain expenses but also gain access to other perks that improve their quality of life, both personally and professionally.

The most common fringe benefits are often included in hiring packages. These include health insurance (with or without homeowners’ benefits), life insurance, tuition, housing payments, employee discounts for partnerships with other companies/service providers, stock options, additional vacation days, or even personal use of a company vehicle.

Less common fringe benefits can be better tailored to the company’s and its employees’ profiles. Examples include pet-friendly workplaces and the provision of yoga or other sports classes.

In terms of format, benefits can be provided in cash, cards/vouchers, or goods and services.

Companies competing for top talent in highly competitive fields can offer the most extraordinary flexible benefits.

As a rule, fringe benefits are taxed under IRS and Social Security, with the exception of some that fall under exemptions provided for by law.

We present below, as examples:

Main conclusions:

– Fringe benefits help companies recruit, motivate, and retain employees;

– Companies that compete for the most sought-after personal skills tend to offer the most advantageous benefits;

– Some of the most common flexible benefits, such as health insurance and life insurance, are exempt from income tax and INSS (National Institute of Social Security).

To monitor and clarify all questions related to this and other topics, Nominaurea has a Human Resources team always available to assist you.