In today's competitive job market, offering compelling fringe benefits is crucial for attracting and retaining top talent. It’s not a simple “extra,” that’s why having diverse fringe benefits examples can significantly enhance employee satisfaction and loyalty.
This article will delve into the most popular examples of fringe benefits to offer in 2024, providing HR professionals and people managers with actionable insights to improve their benefits packages and foster a positive workplace environment.
What are Fringe Benefits?
Before explaining what are examples of fringe benefits, we need to understand the core concept. Fringe benefits are additional compensations provided to employees beyond their regular salary or wages.
These benefits serve as incentives to attract, retain, and motivate employees, enhancing their overall compensation package. They can vary widely and are often tailored to meet the specific needs and preferences of the workforce.
Do you have some in mind already? Here are a few fringe benefits examples:
- Health Insurance: Medical, dental, vision coverage.
- Retirement Plans: 401k (in the US), the SIPP (in the UK), pension plans, profit-sharing plans.
- Paid Time Off: Vacation days, sick leave, personal days.
- Bonuses: Performance bonuses, holiday bonuses, signing bonuses.
- Life and Disability Insurance: Financial protection in case of death or disability.
- Flexible Work Arrangements: Telecommuting, flexible hours, job sharing.
- Educational Assistance: Tuition reimbursement, student loan repayment.
- Employee Discounts: Discounts on company products or services.
- Wellness Programs: Gym memberships, wellness coaching, health screenings.
- Childcare Assistance: On-site childcare, childcare subsidies.
These fringe benefits examples illustrate the various ways companies can enhance their compensation packages, but… Why are they so important? Let’s discover it in the next section.
Why is Offering Fringe Benefits Important?
It can be hard to believe, but according to research by Business Insider, 79% of employees would rather stay in a job where they feel valued, even if it means earning less. Even though monetary compensation is important, Millennials and Gen Z value fringe benefits too. This could be an opportunity to benefit both, the organization and its talent.
These additional compensations serve multiple purposes, here’s an exploration of why offering fringe benefits is crucial and the advantages it brings:
- Employee Satisfaction: When employees feel their well-being is valued through comprehensive benefits packages, they are more likely to experience higher job satisfaction.
- Retention: Employees are more likely to stay with a company that offers benefits tailored to their needs, such as commuter benefits, stock options, and profit sharing.
- Enhancing Company Culture: Offering fringe benefits also enhances company culture by promoting a supportive and inclusive environment. Examples of fringe benefits like gym memberships and mental health support demonstrate a company's commitment to employees' holistic well-being.
- Productivity: When employees are healthy, satisfied, and less stressed, their productivity levels naturally increase. For example, flexible spending accounts can reduce the financial stress associated with healthcare costs.
13 Fringe Benefit Examples
Now we are going to give you a fringe benefits list. Which one should you choose? It depends on the size of your company, budget, and goals. All the fringe benefits examples above are suitable for all kinds of companies, just remember to consider your talent’s preferences and needs.
1. Health Insurance
We can't start a list of fringe benefits without mentioning health insurance plans. They cover a range of medical expenses, including doctor visits, hospital stays, surgeries, prescriptions, and often extend to dental and vision care. Employers typically cover a significant portion of the premiums, making healthcare more affordable for employees.
This benefit significantly reduces the financial stress associated with healthcare costs, ensuring employees and their families have access to necessary medical services.
2. Retirement Plans
Retirement plans, such as 401 k plans (US), SIPP (UK), pensions, or Roth IRAs, allow employees to save for their future. Employers often contribute to these plans, matching a percentage of the employee's contributions, which helps build a substantial retirement fund.
These plans can lead to higher job satisfaction and loyalty, as employees see their employer as a partner in their financial well-being.
3. Paid Time Off (PTO)
Among the common fringe benefits we also have PTO. It encompasses vacation days, sick leave, and personal days that employees can use while still receiving their regular pay. Some companies like Meditopia offer unlimited PTO, while others have a fixed number of days allocated per year.
This fringe benefit allows employees to rest and recharge, which is essential for maintaining a healthy work-life balance. Hence, it reduces burnout and increases overall job satisfaction.
4. Bonuses
Bonuses are additional financial rewards given to employees based on performance, company profits, or achieving specific targets. They can be distributed annually, quarterly, or as one-time payments.
They align employees’ goals with the company's success, boosting motivation, productivity, and morale.
5. Employee Discounts
Consider including in your fringe benefits package some special bonuses (related or not to your company's service.) For example, companies like Amazon offer discounts on their products or services to employees, which can range from a percentage off retail prices to free or heavily discounted items.
Employee discounts add value to the compensation package and foster loyalty and pride in the company. This benefit can also boost the company’s sales and product visibility through internal promotion.
6. Tuition Reimbursement
Tuition reimbursement programs cover part or all of the costs of further education for employees. This can include undergraduate or graduate courses, professional certifications, and other educational pursuits.
By supporting their professional development through further education, companies encourage continuous learning and professional growth. This not only benefits the employee by enhancing their skills and career prospects but also benefits the company by cultivating a more knowledgeable and capable workforce.
7. Wellness Programs
Wellness programs may include gym memberships, wellness coaching, health screenings, stress management programs, and access to mental health resources.
These programs promote physical and mental health, leading to a more productive and engaged workforce. You can count on Meditopia’s all-in-one mental well-being solutions for work! We have programs, meditations, talks, and even SOUL, our AI mental health companion.
8. Flexible Spending Accounts (FSAs)
FSAs allow employees to set aside pre-tax dollars for eligible healthcare and dependent care expenses. These accounts help cover costs like medical co-pays, prescriptions, and daycare.
This financial flexibility can reduce stress and help employees manage out-of-pocket costs more effectively.
9. Dependent Care Assistance
Dependent care assistance programs provide financial support for childcare or eldercare expenses. This can include direct subsidies, vouchers, or on-site childcare facilities.
This benefit reduces the stress and financial burden of caring for dependents, allowing employees to focus better on their work. It also demonstrates the company’s commitment to supporting diversity and inclusion.
10. Commuter Benefits
Commuter benefits offer subsidies or reimbursements for transportation costs, including public transit passes, parking, and ride-sharing services. We talk more about this topic and the tax benefits for employees and organizations in our blog.
These benefits make commuting more affordable and less stressful, which can improve punctuality and reduce absenteeism. They also support environmental sustainability by encouraging the use of public transportation.
11. Relocation Assistance
Relocation assistance provides financial and logistical support for employees moving to a new location for work. This can include moving expenses, temporary housing, and travel costs.
Easing the transition process for relocating employees helps them settle in quickly and focus on their roles, reducing stress and enhancing productivity.
12. Remote Work Allowance
A remote work allowance is a stipend provided to employees who work from home to help cover the costs associated with setting up and maintaining a home office. This allowance can include expenses for high-speed internet, office supplies, ergonomic furniture, and utility bills.
It benefits employees by helping them to save some money on regular services, increasing their company loyalty and work satisfaction levels.
13. Company Car
A company car provides employees with a vehicle for personal and professional use, often including maintenance and fuel costs.
This benefit reduces personal transportation expenses and serves as a valuable perk, enhancing job satisfaction and loyalty.
Which fringe benefits are tax-exempt?
After talking about employee fringe benefits examples, we need to mention another important topic: Taxes. Tax-exempt fringe benefits are perks provided by an employer to employees that are not subject to income tax. These benefits are designed to enhance the overall compensation package without increasing the employee's tax burden.
Offering tax-exempt benefits can be a strategic way for employers to attract and retain talent, while also providing meaningful support to employees.
In the UK, several fringe benefits examples are tax-exempt, helping to provide employees with valuable perks without the associated tax liability:
- Pension contributions
- Childcare vouchers
- Cycle to work scheme
- Health screenings
- Relocation Expenses (tax-free up to £8,000.)
In the European Union, tax-exempt fringe benefits to employees can vary by country, but several benefits are commonly recognized across multiple member states:
- Meal vouchers
- Health and safety equipment
- Public transport subsidies
- Professional training
- Childcare support
Key Takeaways
- Fringe benefits are additional compensations provided beyond regular salaries, crucial for attracting, retaining, and motivating employees.
- They can range from traditional perks like health insurance and retirement plans to modern benefits like remote work allowances and wellness programs.
- Many fringe benefits are tax-exempt, offering significant financial advantages to both employers and employees.
Examples And Types Of Fringe Benefits: FAQs
Is salary sacrifice a fringe benefit?
Salary sacrifice is a method of restructuring an employee's salary where a portion is exchanged for non-cash benefits, which are considered fringe benefits.
Are fringe benefits classed as income?
It depends. Fringe benefits are generally considered as part of an employee's taxable income, but many can be tax-exempt under specific conditions.
How do fringe benefits affect employee satisfaction?
Fringe benefits enhance employee satisfaction by providing additional value and support beyond regular wages, leading to improved morale, loyalty, and work-life balance.
What is the difference between fringe benefits and salary?
Salary is the fixed cash compensation paid to employees, while fringe benefits are additional perks and non-cash compensations provided alongside salary. The can coexist, but can’t erase one another.
Can fringe benefits be negotiated?
Yes, fringe benefits can often be negotiated between employers and employees, especially during hiring or performance reviews, to better meet individual needs and preferences.
