How Much Are Flawless Benefits Worth?

fringe benefits

fringe benefits are all the unappreciated bonuses, advantages and incentives that are given to an employee as part of an employment contract. These benefits may come in the form of paid time off, health care insurance or group coverage of childcare and travel expenses. In general terms, employee perks are those which an employer provides in return for the employee’s commitment and loyalty. Although it is sometimes difficult to determine what perks are actually necessary and which employees really deserve them, there are certain factors that should be considered. These factors become even more important when a company adopts a program that not only compensates employees for their work but also for their past and present behaviors and attitudes.

Most employee perks and fringe benefits are extremely advantageous to the employees and employers. However, there are times when these perks are either misused or taken for granted by employees. Fringe benefits in the form of employee benefits and services include various forms of non-cash compensation offered to employees as well as their regular wages or salaries. For instance, situations where the employee exchanges regular wages for any other form of fringe benefit is usually known as a “payout” or “cash down” arrangement. The definition of a payout is that, in return for an agreed upon amount of service, an employee will receive cash.

Another type of fringe benefits is that which is included in benefits packages offered to current employees. In addition to cash, most companies provide fringe benefits like free meals, free medical care or dental care, free business attire and the like. Some employers also give employees an opportunity to purchase new cars or items of personal use at a discounted rate. These benefits are considered to be employee “perks,” because they are not mandatory and employees do not have to resort to them when they want to buy something. Consequently, most employers consider such perks as “freebies” or special deals.

Employers also offer fringe benefits for employees who have retired or who are “time outs”. There are a lot of employers who have been seen to reimburse employees for the cost of expensive travel tickets, hotel rooms, and other expenses incurred in order to work outside their premises. At times, employers even reimburse fringe benefits to employees who have been laid off from their jobs. However, one should always remember that employees are not allowed to deduct any costs for such perks from their taxes.

It must be kept in mind that in some cases, employers may deduct such benefits as parking passes or vehicle rental from the employee’s gross income. This would, however, depend on the employee’s personal circumstances. It must also be kept in mind that in Canada, there are some limits placed on the amount of such fringe benefits that an employee can claim. One example is that an employee cannot claim a car as one of his/her fringe benefits if the car is leased from the company. As a rule of thumb, all benefits related to a personal residence must be claimed under the spouse’s tax return.

In the end, it is up to an employee to decide whether such fringe benefits are worth the cost. However, it is also important to keep in mind that these benefits are tax-deductible to the employer only. Filing the tax return should be done with a certified public accountant or bookkeeper. If one is not sure about how to file their own return, they should consider hiring a qualified advisor. This will ensure that filing the correct form is done, and also will ensure that the appropriate tax rebates are received.

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