28 April 2008
Fringe benefits and benefits in kind (also called employee benefits, perquisites, or perks) are various non-wage compensations provided to employees in addition to their normal wages or salaries. Where an employee exchanges (cash) wages for some other form of benefit, this is generally referred to as a 'salary sacrifice' arrangement.
Fringe benefits can also include but are not limited to: (employer-provided or employer-paid) housing, group insurance (health, dental, life etc.), income protection, retirement benefits, daycare, tuition reimbursement, sick leave, vacation (paid and non-paid), funding of education, and other specialized benefits. The purpose of the benefits is to increase the economic security of employees.
The term perks is often used colloquially to refer to those benefits of a more discretionary nature. Often, perks are given to employees who are doing notably well and/or have seniority. Common perks are company cars, hotel stays, free refreshments, and entertainment & leisure activities on work time, free meal coupons, usage of motorcars and aircrafts, conveyance tour & travel expenses and latest addition being Employee Stock Option Plan.
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