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FRINGE BENEFITS
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Definition Fringe benefit may be defined as
Compensation in addition to direct wages or salaries, such
as company car, house allowance,
medical insurance, paid holidays, pension schemes,
subsidized meals. Some fringe benefits are regarded part
of a taxable income
In simple words
Any nonwage payment or benefit granted to employees
byemployers
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Employers' payments for fringe benefits are included in
employee-compensation costs and therefore are not
usually taxed. If the cost of fringe benefits were paid
directly as wages, the worker would pay taxes on this
amount and therefore have less to spend when purchasing
equivalent benefits independently
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OBJECTIVES OF FRINGE
BENEFITS
The view point of employers is that fringe benefits forman
important part of employee incentives to obtain their
loyalty and retaining them. The important objectives of
fringe benefits are:
To create and improve sound industrial relations
To boost up employee morale.
To motivate the employees by identifying and satisfyingtheir
unsatisfied needs.
To provide qualitative work environment and work life.
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To provide security to the employees against social risks
like old age benefits and maternity benefits.
To protect the health of the employees and to provide
safety to the employees against accidents.
To create a sense of belongingness among employees and
to retain them. Hence, fringe benefits are called golden
hand-cuffs.
To meet requirements of various legislations relating to
fringe benefits.
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Organizations provide a variety of fringe benefits.
The fringe benefits are classified under four heads as given
here
under:
TYPES OF FRINGE
BENEFITS
Employment SecurityHealth ProtectionOld Age and Retirement
Personnel Identification, Participation and Stimulation
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Benefits under this head include unemployment, insurance,
leave travel pay, overtime pay, level for negotiation,
holidays,
cost of living bonus, jobs to the sons/daughters of the
employees
Safety Health Protection
Benefits under this head include accident insurance,
disability insurance, health insurance, hospitalization,
life
insurance, medical care, sick benefits, sick leave, etc.
Employment Security
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Old age and retirement
Benefits under this category include: income plans,
pension, gratuity, provident fund, old age travelingconcession
to retired employees, jobs to sons/daughters
of the deceased employee and the like.
Personnel Identification,Participation and Stimulation
This category covers the following benefits:
anniversary awards, attendance bonus, canteen,
cooperative credit societies, educational facilities,
housing, income tax aid, stress counseling, safety
measures etc.
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