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Simple English definitions for legal terms
fringe benefit
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A quick definition of fringe benefit:
Term: Fringe Benefit
Definition: Fringe benefits are extra things that an employer gives to their employees in addition to their regular pay. These benefits can include things like health insurance, life insurance, discounts on products or services, free parking, access to a gym, and meal plans. Some of these benefits are not taxed as long as certain rules are followed. The government has a list of all the benefits that are not taxed and the conditions that must be met to qualify for the tax exemption.
A more thorough explanation:
A fringe benefit is an extra benefit that an employee receives in addition to their regular wages. These benefits can be tax-exempt if certain conditions are met. The Internal Revenue Code's Section 132 lists all the fringe benefits that are excluded from taxable income and the conditions for the exclusion.
- Health insurance
- Life insurance
- Employee discounts
- Qualified parking
- On-premises athletic facilities
- Certain meal plans
These examples illustrate how fringe benefits can be different from regular wages. For instance, an employee may receive health insurance coverage as a fringe benefit, which is not part of their regular salary. Similarly, an employee may receive discounts on products or services offered by their employer, which is also a fringe benefit.