<prompt> Human: Either way the taxable income to the employee is the same, correct? Assuming these are taxable benefits. What benefit is such an arrangement to the employer?  <response>: IIRC benefits only came about in the 1940s when a wage ceiling was put into effect during WWII, which meant that you had limits on the actual salary you could get from your employer. To compensate and compete, employers started adding benefits like healthcare and pensions that were not subject to the wage ceiling regulations.The system we have now is an artifact of that era, including dependency on employment for healthcare. 