If you want to bring top talent to your business, consider offering fringe benefits. As a business owner or manager, you know that salary isn’t always the determining factor in who accepts your job offer. Sometimes, it’s intangibles like company culture or how well your team works together.
Other times, it’s the perks you offer on top of wages that motivate a potential employee to come to work for you. These are the fringe benefits that can really make a difference in your hiring and retention process.
In this article, the management experts at Sling discuss how you can use fringe benefits to offer more to your existing and future employees.
What Are Fringe Benefits?
A fringe benefit is any perk that a business provides for its employees in addition to their hourly wage or salary.
Here are some common fringe benefits:
- Gym membership
- Medical insurance
- Dental insurance
- Paid time off
- Year-end performance bonuses
- Life insurance
- Educational assistance
- Profit sharing
- Housing allowance
- Company car
- Student loan payoff assistance
- Free smartphone or tablet
- Stipend for cable connection or smartphone bill
- Maternity and paternity leave
The list goes on and on. And, really, you can create your own fringe benefits to suit the way your business operates and what it can afford to offer.
Whatever form the fringe benefits take, many businesses view these little extras as an expression of loyalty for valued employees and hope that they will create a very real boost in morale and engagement.
Why Should You Offer Fringe Benefits?
The Employee’s Perspective
Absenteeism has a profound effect on your business’s productivity. And nine times out of 10, that absenteeism can be traced back to illness. But when lifestyle fringe benefits — like health insurance and gym memberships — are offered, employees are healthier and miss less work.
The more benefits an employee gets from his or her employer the happier (and, as a result, more productive) they tend to be on the job. Adding just one fringe benefit is an easy and effective way to improve work performance in your teams.
3) Career Advancement
Fringe benefits can play a twofold role in promoting career advancement.
Some businesses only offer fringe benefits to upper-level positions. That gives those employees in lower-level positions an incentive to seek career advancement.
Additionally, fringe benefits like job training and educational assistance give these employees the means they need to acquire new skills, which can lead to promotions and career advancement.
The Employer’s Perspective
1) More Talent
Fringe benefit packages can attract talented workers and give them more of a reason to choose your business over a competitor’s.
With a strong fringe benefits package in place, you may not even have to advertise for new hires. Word of mouth from existing employees may be enough to draw skilled workers to your door.
2) Stronger Hires
When talent is naturally attracted to your business, you have plenty of choices in who you hire. That can lead to bringing on board individuals with more skills than just those few required to get the job done.
And with a more diverse team, your entire business will benefit.
3) Improved Performance
Fringe benefits motivate employees to work harder, which leads to improved performance overall. That, in turn, leads to higher company revenues and a successful business. All of that stems from a few well-applied fringe benefits.
Are Fringe Benefits Taxable?
In most cases, fringe benefits are taxable. There are a number of notable exceptions to this rule, including:
- Accident and health benefits
- Achievement awards
- Adoption assistance
- Athletic facilities
- Dependent care assistance
- Educational assistance
- Employee discounts
- Employee stock options
- Employer-provided cell phones
- Group term life insurance coverage
- Health savings accounts (HSAs)
These exclusions aren’t subject to federal income tax withholding, social security, Medicare, or federal unemployment tax and aren’t reported on Form W-2.
When fringe benefits are taxable, they usually fall into one of two categories:
- Partially taxable
Partially taxable means that only a percentage of the value of the fringe benefit is used to calculate the tax due. Transportation allowances and company cars are good examples of partially taxable fringe benefits.
Tax-deferred means that you don’t have to pay taxes right now, but you will eventually. Pension plans and 401ks are good examples of tax-deferred fringe benefits.
For more information on how fringe benefits may impact your bottom line, refer to the IRS’s Publication 15-B, Employer’s Tax Guide To Fringe Benefits, or consult a qualified attorney or tax professional.
Sling Makes It Easy To Offer A Nontaxable Fringe Benefit
One fringe benefit that often goes overlooked by many employers is a flexible schedule. There are many forms of flexible schedule available today, including:
There are so many options you’re sure to find one that works well for your business. Best of all, flexible schedules are nontaxable under the current IRS regulations. There’s no extra burden on you (e.g., paperwork, labor, or tax withholding) like there would be if you offered a fringe benefit with monetary value, like a company car or a gym membership.
Once you decide to offer a flexible schedule as a fringe benefit, the Sling app makes it easy to incorporate even the most complicated shifts into your regular workflow.
Sling is packed with intuitive tools — like employee and task color coding, recurring shifts, and time-off notices. Sling even allows for notifying employees about no-shows and available shifts with advanced communication features and push notifications sent directly to their phones.
These features (and many more) make Sling the best schedule maker for businesses of all sizes. Try Sling free today and you’ll discover how it opens up blocks of time for more important tasks and allows you to offer a fringe benefit without putting undue burden on your business.
For more free resources to help you manage your business better, organize and schedule your team, and track and calculate labor costs, visit GetSling.com today.