What is Fringe benefits ?
Fringe benefits are those benefits which are provided by an employer to or for the benefit of an employee and which are not in the form of wages, salaries and time related payments.
Fringe Benefits embrace a range of benefits and services that employees receive as part of their total compensation package. Benefits and services, however, are indirect compensation because they are usually extended as a condition of employment and not directly related to performance.
The main features of fringe benefits:
a. They are paid to all employees (unlike incentives which are paid to specific employees whose work is above standard) based on their membership in the organization.
b. They are supplementary forms of compensation.
c. They help raise the living conditions of employees.
d. They are indirect compensation because they are usually extended as a condition of employment and are not directly related to performance.
e. They may be statutory or voluntary. Provident fund is a statutory benefit whereas transport is a voluntary benefit.