How To Use Fringe Benefits To Motivate Employees

Some jobs come with a few perks or freebies that are unrelated to employee salary. These perks or bonuses other than employee's direct wages are known as fringe benefits and can include health and life insurance, gym memberships, and paid vacation.

This is great when you need more commitment from your employees, seek ways to keep the best talent in your service or simply to make your business more attractive to potential employees. Here is everything you need to know about how to use fringe benefits to motivate employees.

What are fringe benefits?

how to use fringe benefits to motivate employees, common fringe benefits

They are extra compensations that are not monetary, which an employer provides to employees. Salaries, bonuses, and all other forms of cash compensations are not included.

Fringe benefits save employees a couple of expenses and make the job more comfortable by covering commuter benefits, offering wellness programs, and providing dependent care assistance.

While some fringe benefits are not included in the employee's taxable income, quite a number of them are considered taxable fringe benefits and are subject to federal income tax withholding.

The exempt status of fringe benefits can differ based on various factors such as the nature of the benefit, its value, and the employee's salary. There are, however, those required fringe benefits that are a legal obligation and those that are optional, such as gym memberships and training programs.

The whole idea about offering fringe benefits is to increase overall employee satisfaction, motivate and engage workers, and retain good employees.

The Importance of Fringe Benefits

In terms of fringe benefits, businesses may and ought to be inventive. After all, they can begin to actually compete to establish themselves as a desirable employer by paying attention to their employees' needs and providing fringe benefits such as athletic facilities, childcare assistance, and training programs that are important to them.

Because these fringe benefits are optional, employees (and potential hires) pay attention to perks like company cars, athletic facilities, and free commuter bus service. Consider fringe benefits to be significant instruments that firms can use to attract and retain the best personnel.

Are supplemental benefits becoming more popular?

Employers understand the true worth of talent in today's environment, whether we are in the midst of or after the "Great Resignation." Top performers, leaders, and employees have never been more vital, and providing fringe benefits like company cars, positive workplace culture, and free commuter bus service is crucial to attract them.

Furthermore, it has never been more difficult to recruit and retain them, which is why fringe benefits are so vital. They are important because top talent seeks more than an interesting role and a good salary. Professionals today expect fringe benefits to support "the full person," including mental health resources, work life balance initiatives, and wellness programs.

This became very apparent throughout the Covid-19 epidemic, as businesses sought to support employees' mental health and work life balance through innovative fringe benefits. According to a recent survey of hundreds of UK business leaders, nearly half (46%) claim their businesses have added additional perks as a result of the crisis. According to this survey, the most popular fringe benefits are:

Employee surveys conducted previous to 2020 revealed the importance of fringe benefits. According to a 2019 UK survey, 66% of employees considered fringe benefits such as paid holidays, commuter benefits, and dependent care assistance as significant as or more important than their pay.

How fringe benefits work?

employee benefits, or her employer

In today’s competitive business space, retaining highly compensated employees with basic salaries can be incredibly difficult, requiring companies to consider fringe benefits that are taxable to boost employee satisfaction.

That’s where fringe benefits, including those that cover lost wages, become relevant to both employees and employers. Even though fringe benefits are designed to make workers more comfortable on the job, they also enhance a company’s reputation, which enables employees to feel valued and motivated.

Types of fringe benefits

covers lost wages

Two major classes of fringe benefits exist. Some perks are a legal requirement while others are optional.

1. Fringe benefits that are legally required

Employers must provide health care, cushion economic hardships, cover lost wages, and offer core benefits for retirement sustenance. Examples of compulsory fringe benefits include the following:

Medical insurance

Medical insurance is covered by the Patient Protection and Affordable Care Act, which is detailed in the employer's tax guide for compliance. It states that companies with more than fifty people should provide healthcare plans, which tax professionals can help implement. And workers should have health insurance coverage. The healthcare insurance plans cover access to primary care physicians, emergency care, and so on.

Medical leave

Under the Family and Medical Leave Act (FMLA), businesses with more than 50 employees are required to provide up to 12 weeks of unpaid leave for certain medical situations for the employee or a member of the employee's immediate family.

2. Fringe benefits not legally required

These perks are left at the discretion of the employer. Some of them are taxable for the employer while some are not. Examples of optional benefits, which contribute to customer satisfaction and a positive business operates environment, may include:

  • Retirement benefits
  • Achievement awards
  • Fitness and exercise facilities
  • Health
  • Life
  • Employee discounts
  • Elder and child care benefits
  • Tuition reimbursement
  • Education assistance
  • Transport and commute benefits
  • Paid leave or time off
  • Paid vacations or holidays

Why should you provide fringe benefits?

offer fringe benefits, enabling employees

Fringe benefits from an employer standpoint are an investment and below are a few reasons why.

Company reputation

With so many businesses out there and the fierce competition, it makes great sense to invest in fringe benefits. Those businesses that give extra benefits besides desired salary often stand out among their competitors. They tend to enjoy more customer patronage and increased application from potential employees.

Employee health and wellness

When workers are in poor health, they spend valuable time for quality work in fixing their health. Work-related injuries and illnesses known as occupational hazards are a real possibility. A safe work environment created through fringe benefits like health insurance and gym membership not only improves employee health but will reduce sick leaves.

Employee engagement

Fringe benefits provide some sort of reward which impacts greatly employee work experience. By making your workers feel that their effort is being recognized, you earn their loyalty. Increased employee loyalty translates to increased productivity because worker’s self-esteem is protected.

Compensation for workers

Workers’ compensation benefits are typically administered on a state-by-state basis, not by the Department of Labor, unless in the specific case of federal employees. This system provides compensation for employees who suffer work-related injuries or illnesses.

How to use fringe benefits to motivate employees

pay taxes, pension plans

Employees have been known to complain about being taken for granted. When things like these happen, morale is low and the quality of work goes down. This is where employee motivation and benefits come into action.

3 amazing things your business can do with Paystubsnow

If you haven't been using an online paystubs generator, here is why you should use one today. As an employer, you can use Paystubsnow to organize your taxes for those taxable benefits.

Blog Post FAQ

You can use PaystubsNow to create a paystub specifically designed to display an employee's fringe benefits. Once you’re on the dashboard, you can enter employee details including fringe benefits such as health, tuition, or retirement contributions. Hit "create" and you'll have a detailed and professional paystub ready to download and print. This can help motivate your employees by clearly showing the extras they're receiving in their compensation package.

Absolutely! An efficient paycheck stub maker can be instrumental in reflecting fringe benefits in an employee's pay stub. Having these benefits clearly delineated on the pay stub not only creates transparency but can also boost employee motivation. The key is to ensure that the paycheck stub maker is effective and precise. At Paystubsnow.com, the software tool specifically designed for this purpose ensures accuracy and efficiency in showing all the vital information, including fringe benefits, deductions, and net pay.

The paystub generator from Paystubsnow.com can be an efficient tool in tracking the fringe benefits provided to an employee. You can easily input the specifics of each perk - such as the cash equivalent value - into the paystub generator, which will reflect them accurately on the paystub. This organized record-keeping helps ensure transparency and motivation for the employee while providing necessary compliance with tax regulations for your business.

You can easily create paystubs using PaystubsNow. When creating a paystub, you can include a detailed breakdown of fringe benefits that have been provided to your employees, which isn't only useful for record-keeping, but can also serve to motivate your employees. You just have to input the necessary details, such as payment amount, frequency, and fringe benefits, and the platform will automatically create paystubs containing these details for you.

A "real check stub maker" like PaystubsNow provides a fast and reliable way to create accurate and professional paystubs online. By utilizing this service, employers can ensure transparency and accuracy while distributing fringe benefits such as overtime pay, bonuses, or commissions to motivate their employees. The real check stub maker documents these benefits in a clear, understandable manner, helping employees see the direct financial impact of their hard work, thus increasing motivation and productivity.