Fringe Benefits
Unit 2 Fringe Benefits
Fringe benefits are benefits that don’t usually make part of your fixed component, but are added benefits mainly because of the position/designation you hold in the organization. Fringe benefits therefore vary from employee to employee as per their grades in the organization. Fringe benefits include benefits such as Car + Diesel Allowance, House decoration and renovation allowance, School admission for employee's children, and such benefits that are mostly personal. It may also include; medical insurance, paid holidays, pension schemes, subsidized meals. Some fringe benefits are regarded as part of a taxable income.
The advantage of fringe benefits from an employer point of view can be as followed; it can boost employees moral and pride in the company. It helps attract and retain better-qualified employees. It provides a high-risk coverage at a low cost helping the company’s financial burden. It also improves efficiency and productivity as employees are assured of security for themselves and their families. Premiums are tax deductible as a corporation expense, which means savings with quality coverage.
The advantage for an employee can be as followed; Provides tax benefit to the employees. It provides peace of mind leading to better work as employees are assured of provisions for themselves and families in any mishap. Employees with personal life insurance enjoy additional protection. Lastly confidence in company’s employee benefit schemes boost staff moral and pride in company. So eliminating would result in a company not being able to hire the best employees possible. It wouldn’t be able to get an advantage if they are competitively trying to hire someone.
As a company the disadvantages are the cost of the benefits. And, the costs will be substantial. But, the costs will be offset because your employees will stay with your company for a much longer period of time because you have good benefits. To the employee, certain fringe
Fringe benefits are benefits that don’t usually make part of your fixed component, but are added benefits mainly because of the position/designation you hold in the organization. Fringe benefits therefore vary from employee to employee as per their grades in the organization. Fringe benefits include benefits such as Car + Diesel Allowance, House decoration and renovation allowance, School admission for employee's children, and such benefits that are mostly personal. It may also include; medical insurance, paid holidays, pension schemes, subsidized meals. Some fringe benefits are regarded as part of a taxable income.
The advantage of fringe benefits from an employer point of view can be as followed; it can boost employees moral and pride in the company. It helps attract and retain better-qualified employees. It provides a high-risk coverage at a low cost helping the company’s financial burden. It also improves efficiency and productivity as employees are assured of security for themselves and their families. Premiums are tax deductible as a corporation expense, which means savings with quality coverage.
The advantage for an employee can be as followed; Provides tax benefit to the employees. It provides peace of mind leading to better work as employees are assured of provisions for themselves and families in any mishap. Employees with personal life insurance enjoy additional protection. Lastly confidence in company’s employee benefit schemes boost staff moral and pride in company. So eliminating would result in a company not being able to hire the best employees possible. It wouldn’t be able to get an advantage if they are competitively trying to hire someone.
As a company the disadvantages are the cost of the benefits. And, the costs will be substantial. But, the costs will be offset because your employees will stay with your company for a much longer period of time because you have good benefits. To the employee, certain fringe