what are fringe benefits 
fringe benefits are additions to compensation that companies give their employees some fringe benefits are provided to all employees while others may be offered to executives only some benefits may include a company car paid time off or gym membership employers use fringe benefits to help them recruit motivate and retain high quality talent investopedia nono floresunderstanding fringe benefitscommon fringe benefits are basic items often included in hiring packages these include health insurance life insurance tuition assistance childcare reimbursement cafeteria subsidies below market loans employee discounts employee stock options and personal use of a company owned vehicle uncommon fringe benefits may fit the company profile petsmart and dogtopia both operate pet friendly workplaces ben jerry s rewards its workers with free ice cream 1 the companies that compete for the best talent in highly competitive fields may offer the most extraordinary fringe benefits google s parent company alphabet provides free commuter bus service and a free gourmet cafeteria 2 microsoft gives 20 weeks of paid time off to new birth mothers and 12 weeks for other new parents 3tax considerationsby default fringe benefits are taxable unless they are specifically exempted recipients of taxable fringe benefits include the fair market value in their taxable income for the year the internal revenue service irs maintains a list called the tax guide to fringe benefits the list of fringe benefits excluded from income taxes includes 4all of these exemptions are subject to certain and often complex conditions for example achievement awards are only exempt up to a value of 1 600 for qualified plan awards and a value of 400 for non qualified plan awards 5qualified plan awards are open to all employees not just highly paid employees other exemptions are not available to highly compensated employees if the benefits are given to them but not rank and file employees these include employee discounts adoption assistance and dependent care assistance most but not all fringe benefits that are income tax exempt are also exempt from social security medicare and federal unemployment taxes 4the companies that compete for the best talent in highly competitive fields may offer the most extraordinary fringe benefits valuing fringe benefitsany fringe benefit not named above or any of the benefits named above that does not conform to irs rules for exemption is taxable the exemption rules are complex also for example working condition benefits are taxable to the extent that they are for personal use if an employee is given a laptop the taxable income would be the percentage of the laptop s fair market value devoted to personal use if 80 of its use is personal the taxable income is 80 of the value of the computer in general fringe benefits are valued at fair market value this is the amount the employee would pay for the same benefit at retail 