Frienge Benefits 3f141b

FRINGE BENEFITS

Definition  Fringe benefit may be defined as

“Compensation in addition to direct wages or salaries, such as company car, house allowance, medical insurance, paid holidays, pension schemes, subsidized meals. Some fringe benefits are regarded part of a taxable income” 

In simple words “Any nonwage payment or benefit granted to employees by employers”

 Employers' payments for fringe benefits are included in

employee-compensation costs and therefore are not usually taxed. If the cost of fringe benefits were paid directly as wages, the worker would pay taxes on this amount and therefore have less to spend when purchasing equivalent benefits independently

OBJECTIVES OF FRINGE BENEFITS  The view point of employers is that fringe benefits form

an important part of employee incentives to obtain their loyalty and retaining them. The important objectives of fringe benefits are:  To create and improve sound industrial relations

 To boost up employee morale.  To motivate the employees by identifying and satisfying

their unsatisfied needs.  To provide qualitative work environment and work life.

 To provide security to the employees against social risks

like old age benefits and maternity benefits.

 To protect the health of the employees and to provide

safety to the employees against accidents.

 To create a sense of belongingness among employees and

to retain them. Hence, fringe benefits are called golden hand-cuffs.

 To meet requirements of various legislations relating to

fringe benefits.

TYPES OF FRINGE BENEFITS Organizations provide a variety of fringe benefits. The fringe benefits are classified under four heads as given here under: Employment Security

Health Protection Old Age and Retirement

Personnel Identification, Participation and Stimulation

Employment Security Benefits under this head include unemployment, insurance, leave travel pay, overtime pay, level for negotiation, holidays, cost of living bonus, jobs to the sons/daughters of the employees

Safety Health Protection Benefits under this head include accident insurance, disability insurance, health insurance, hospitalization, life insurance, medical care, sick benefits, sick leave, etc.

Old age and retirement  Benefits under this category include: income plans,

pension, gratuity, provident fund, old age traveling concession to retired employees, jobs to sons/daughters of the deceased employee and the like.

Personnel Identification, Participation and Stimulation 

This category covers the following benefits: anniversary awards, attendance bonus, canteen, cooperative credit societies, educational facilities, housing, income tax aid, stress counseling, safety measures etc.