The perks of full-time employment often extend far beyond your paycheck. You may be offered insurance, vacation days and more.
I talked to Team Clark’s human resources expert, Rebecca Jennings, to get a better understanding of how to maximize your company’s fringe benefits.
In this article, I’m going to define what fringe benefits are as well as take a closer look at which of those benefits are taxable. I’ll also share the top five tips for getting the most out of the benefits your company offers.
What Are Fringe Benefits?
Generally, fringe benefits are any compensation you receive for the work you do beyond your paycheck. If you have paid time off (PTO) or health insurance through your job, you’re receiving fringe benefits. Some companies offer more fringe benefits than others, and there are steps you can take to ensure you’re taking advantage of them.
According to IRS Publication 15-B, “a fringe benefit is a form of pay for the performance of services. For example, you provide an employee with a fringe benefit when you allow the employee to use a business vehicle to commute to and from work.”
Fringe benefits may also include 401(k) matching, education assistance, maternity or paternity leave, fitness access, meals or cafeteria plans and more. You can find more examples in the Employer’s Tax Guide to Fringe Benefits provided by the IRS.
It’s important to take advantage of your fringe benefits so that you aren’t missing out on any perks of employment provided by your company. In order to get the most out of your benefits, it’s important to know how they work and to be aware of any exclusions or time frames.
Are Fringe Benefits Taxed?
According to the IRS, most fringe benefits are taxable and required by law to be included as part of an employee’s pay. Of course, there are some exceptions to this rule.
Certain fringe benefits are fully or partially exempt from taxes and may not show up on your W-2. A few examples of fringe benefits with exclusion rules include the following:
- Health Benefits
- Adoption Assistance
- Athletic Facilities
- Dependent Care Assistance
- Educational Assistance
- Employee Discounts
- Employer-Provided Cell Phones
- Tuition Reduction
For a full list of special rules for fringe benefits, see this table.
Getting the Most Out of Your Fringe Benefits
Employers typically offer fringe benefits in addition to an annual salary for full-time employees.
When it comes to your paycheck, you most likely receive the amount you’re expecting on payday. If you weren’t getting your full pay, you would notice. Unfortunately, it can be harder to make sure you’re getting everything out of the fringe benefits that are available to you.
I met with Team Clark’s human resources expert, Rebecca Jennings, in order to get a better understanding of how to get the most out of your company’s fringe benefits. These are her top five tips:
1. If You Want Something, Ask for It
If you want a program or a benefit that’s not offered at your company, don’t be afraid to ask for it!
Before joining Clark Howard, Rebecca worked in HR for a company that originally housed an employee gym. When the company had to close the gym, several employees continued to ask for access to fitness. As a result, the company was able to bring in a weekly yoga instructor.
Most companies send out surveys at least once a year that give employees an opportunity to provide feedback. This is a great time to suggest programs and benefits.
2. Enroll in 401(k) Matching
Many companies offer some sort of retirement contribution plan, which can include matching your 401(k) contributions up to a certain percent. The catch here is that you may not be enrolled automatically, so be sure to follow up. You may need to check an electronic box or sign a form with HR.
If your company does offer 401(k) matching, you’ll want to make sure you’re at least contributing enough to meet the match to get the most out of this fringe benefit. Of course, you should be putting more into your retirement than the minimum matching requirement at most companies.
3. Use Your HSA or FSA Contributions
A lot of companies also offer a health savings account or flexible spending account. Your employer may have one or both.
In order to get the most out of this benefit, be sure to use your savings within the allotted time. Based on your company’s policy, you may lose the money you haven’t spent at the end of the year.
If you aren’t already enrolled in one of these programs, check out our health insurance guide to see which one is right for you. For a closer look at either program, learn more about health savings accounts and flexible spending accounts here.
4. Take Your Days Off
Be sure to take your paid time off whether it includes vacation days, sick days, and maternity or paternity leave. If the company offers it, use it.
Never feel pressured to go back to work early from maternity leave or have perfect attendance. Time off is your time! Companies legally aren’t able to discriminate against you for taking days off that are offered.
Also, be aware of your company’s general PTO policy. You may have to use your days off within a certain amount of time. Other times, only a certain number of days or hours are able to roll over to the next calendar year. Get the most out of this fringe benefit by taking your time off when you’re able.
5. Look Into Your Insurance Carrier’s Side Programs
In addition to the benefits offered by your employers, be sure to check out any side programs that you can enroll in through your health insurance carrier.
Programs offered by insurance typically encourage wellness, exercise and general health. In exchange for logging your time or making healthier choices, you can earn things like gift cards and rewards.
Insurance carriers may also offer additional services for free to qualifying employees. These services could include legal advice, mental health care or virtual doctors. Specific requirements, rewards and services vary from one insurance carrier to the next.
In addition to these tips, be sure to also ask your employer about charity matching and volunteer days. If you donate to a charity, you may be able to get your employer to match the contribution. Many companies also offer at least one volunteer day that won’t count toward your paid time off.
Whether you’re interviewing for a new job or hoping to get more out of the company you’re already with, learning more about fringe benefits is a great place to start.
I learned so much when I met with our human resources expert, and I recommend that you do the same. Having a short conversation with someone on your company’s HR team is a great way to find out if you’re getting the most out of your fringe benefits.
Keep in mind that if your employers don’t already offer a benefit or program that you’d like to see, it never hurts to ask!
How do you get the most out of your current fringe benefits? Let us know in the comments below.