fringe benefits


Also found in: Dictionary, Thesaurus, Idioms, Wikipedia.

fringe benefits

any additional benefits offered to employees, such as the use of a company car, free meals or luncheon vouchers, interest-free or low-interest loans, private health care subscriptions, subsidized holidays and share purchase schemes. In the case of senior managers, such benefits or perquisites (perks) can be quite substantial in relation to wages and salaries. Companies offer fringe benefits to attract employees and because such benefits provide a low-tax or no-tax means of rewarding employees compared with normally taxed salaries.

Fringe Benefits

Fringe benefits are benefits received by an employee in addition to salary. Examples include educational assistance, moving expense reimbursement, stock options, and dependent care assistance. Some fringe benefits (for example, accident and health benefits, and group-term life insurance (up to $50,000)) may be excluded from the employee's gross income and, therefore, are not subject to federal income tax.
References in periodicals archive ?
• Detail out the IRS rules around when taxes are due on Fringe Benefits
For other fringe benefits that are typically tax-free to employees, there is generally equivalent treatment for 2% shareholders, partners and LLC members.
The following are not excludable as de minimis fringe benefits (Regs.
Fringe benefits provided to MTTPSEs are treated as follows for tax purposes:
The table clearly shows differentials among the groups of workers with regard to fringe benefits. In 2005, employers in the traditional technological industries paid a total of NIS 1.5 billion for fringe benefits for their workers, a sum that amounted to 15.9% of the total salary in that category.
In addition, special rules apply for certain categories of de minimis fringe benefits, including group term life insurance on the lives of dependents, employer-operated eating facilities, and public transit passes (or reimbursements) for independent contractors.
With the enactment of the Deficit Reduction Act of 1984 (DRA 1984), (1) Congress at last addressed the federal income taxation treatment of nonstatutory fringe benefits, (2) an area that had been shaped by administrative pronouncements of the Internal Revenue Service (Service) (3) punctuated by judicial oversight.
These contributions also appear to be taxable fringe benefits subject to section 3402(a) income tax withholding, and wages subject to Social Security and Medicare taxes.
"You need to understand where there are the greatest potential for problems--especially where there are clear rules." Three areas that need special attention, he says, involve: Section 162(m) of the IRS code, which covers deductions for compensation in excess of $1 million; loans to executives; and fringe benefits.
ERIC Descriptors: Charter Schools; School Policy; Funding Formulas; Fringe Benefits; Educational Finance; Budgets; State Legislation
* The average German worker is paid 26.36 euros per hour, of which 44% is fringe benefits.
Observation: This Chief Counsel Advice rationale also may apply to other situations where an S corporation provides taxable, properly valued fringe benefits to employee-shareholders.