Want To Perk Up Employees With Fringe Benefits?
A company car, travel expenses, workplace discounts. These are just a few of the ways that your business can reward employees (or provide a little bit of a perk throughout the course of employment).
A fringe benefit is something extra that your employees can receive from you. This can be done as either:
- An addition on top of the salary or wage that you are currently paying them, or
- In return for foregoing some of their salary under a salary sacrifice arrangement.
While not all jobs may provide fringe benefits such as these, if your business does, you may need to carefully consider the options available. You will also need to consider whether or not providing these fringe benefits is a fiscally feasible option for your business, and what you can actually afford to give (if you choose to do so).
What Is Considered A Fringe Benefit?
A wide range of perks can be classed as fringe benefits. The most common ones that you can provide to your employees (if you choose to do so) are:
- A leased vehicle for your employee’s personal use (under a ‘novated lease’ arrangement, or personal use of a company car
- Gym/Health memberships
- Entertainment expenses, such as free/discounted food, cinema tickets, accommodation etc.
- Private health insurance
- Childcare costs and school fees
- For employees who do not live in your business’s locale, you can provide a living-away-from-home allowance (LAFHA).
- Shares and bonds
Fringe benefits can help your employees enjoy the perks resulting from the job and (depending on your employees’ personal circumstances) reduce their taxable income.
Fringe benefits enable your business to remain at a competitive edge in attracting and retaining employees (if it is feasible for you and your business to be offering them). In a competitive job market where hiring and maintaining long-term talent is the goal for many employers, offering perks and benefits could situate your business over the others when it comes to catching the eyes of prospective employees.
As an employer who provides work perks, you will need to take into account that you may be liable for any applicable FBT on fringe benefits provided to your employees. This is calculated on the taxable value of a fringe benefit, which we can provide assistance with.
