What are fringe benefits?
Fringe benefits are payments in kind by a business to an employee in addition to their normal remuneration wages or salary for their work. For example, a business provides an employee with a fringe benefit when they allow the employee to use a business vehicle to commute to and from work.
Examples of employee benefits include holiday pay, subsidized meals, car fringe benefits, pension schemes, business health insurance, childcare assistance, life insurance benefits, and employee discounts.
The advantage of an employer paying fringe benefits is that some employee benefits are exempt from taxation, and so for the same cost to the business, the employee receives a greater benefit than had the amount been paid to them as taxable wages or salary. Not all benefits are exempt from taxation, others may be subject to fringe benefits tax.
Fringe benefits are sometimes referred to as employee benefits or benefits in kind.
Additional information on employee benefits can also be found at Wikipedia Employee benefits Definition.
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About the Author
Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years in all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.