Money isn’t the only way to reward your employees for their hard work. Fringe benefits, or employee benefits, are the perfect way to show your employees how much you value them. By offering a combination of modern and traditional perks, such as 401(k) plans and pet insurance, you are more likely to retain your current employees and attract the top talent that you so desire. Continue reading as we dive into a few of the most commonly asked questions regarding fringe benefits.
1. Are employee benefits taxable?
Unless individually excluded by IRS code, all compensation that you pay your employees is taxable. Some examples of IRS exclusions include education assistance, athletic facilities, health insurance, and retirement planning. Fringe benefits that are taxable need to be listed as income on W-2 forms. For a list of tax-free and taxable benefits, you can check out the Employer’s Tax Guide to Fringe Benefits created by the IRS.
2. Do I really need to offer benefits?
By providing employee benefits, you show your employees that you care about their health and wellbeing as well as their future. By improving your workplace wellness, you will increase your overall productivity with less doctor visits. Offering benefits that are on-trend can also be the tie-breaker between you and a competitor when a potential employee is considering applying. As for your current employees, fringe benefits increase motivation and inspire everyone to do better. It also might result in them being more dedicated employees.
3. Do benefits need to be the same for every employee?
Equal benefits amongst employees are actually not required by federal law. As an employer, you are allowed discretion when creating benefit plans and can determine qualifications based on various employment-based classifications like: department, full or part-time workers, tenure. However, you can not discriminate against protected groups. Even if discrimination is not your intention, you may still be subject to penalties and fines.
4. I want to offer Fortune 500 benefits, but I can’t afford them. How can I offer them without the price?
By outsourcing your HR to a PEO, your small business can offer Fortune 500 benefits without the Fortune 500 price. The reason this is possible is because a PEO will open the door to a much greater talent pool and allow you to compete in the bigger marketplace.
Outsourcing your HR to someone like Delta Administrative Services will give you on-site enrollment access to Fortune 500 benefits like major medical, dental, vision, disability, and prescription drug programs to name a few. Contact us today to learn more about how we can help you offer better benefits to your employees.