Fringe Benefit Definition
A fringe benefit is a benefit that employers give employees outside of their stated cash wages. For example, these benefits might include a range of perks such as health insurance, assistance with education, legal services, access to athletic facilities, bonuses, paid vacation time, employee discounts and stock options.
Many employers offer benefits in addition to regular cash payments. Some fringe benefits are taxable, while others are nontaxable or partially taxable. The IRS “Taxable Fringe Benefit Guide” explains that employers must include taxable benefits in the employee’s reported wages on the W-2 form. For example, bonuses must be included in wages on the W-2 form. If someone other than the employee receives the benefit, such as the employee’s spouse or children, the employee may still have to pay taxes on the benefit.