What Are the Different Types of Fringe Benefits?

Marissa Meyer
Marissa Meyer
Some employers provide paid maternity leave.
Some employers provide paid maternity leave.

Fringe benefits are typically insurance policies and other perks provided by an employer to employees as part of a comprehensive compensation package. Most are not subject to income tax because they are either specifically excluded by law, or paid for by the employee. Fringe benefits such as holiday gifts or bonuses, and certain types of retirement and insurance benefits, are considered taxable income, however. Many employers offer specific fringe benefits packages, while others allow workers to select or create a plan. Benefits offered can include, but are not limited to, various insurances, paid or unpaid leave, retirement plans, discounts, and tuition assistance.

Many employers offer some form of healthcare coverage as a fringe benefit.
Many employers offer some form of healthcare coverage as a fringe benefit.

Insurance benefits usually include those for health, life, and disability. Some employers offer employees access to group rates, while others pay a portion — or all — of their workers' premiums. Health plans may be traditional HMO or PPO policies, or health savings accounts. Disability insurance may be offered in short and long-term options. Some employers may offer other types of insurance, such as that for travel or pet health.

Vision insurance is an example of a fringe benefit.
Vision insurance is an example of a fringe benefit.

Many employers offer some type of paid leave as part of a worker's fringe benefits. While certain amounts of unpaid family and medical leave are usually required by law, the ability to accumulate and use paid time off is a job perk. Paid leave may be granted for medical or personal reasons, or disbursed on holidays. Some employers provide paid maternity and paternity leaves, and others offer paid leave for new mothers via short-term disability benefits.

Paid leave to take care of a seriously ill relative is one kind of fringe benefit.
Paid leave to take care of a seriously ill relative is one kind of fringe benefit.

Retirement plans vary by employer. Some industries offer pensions that may be fully funded by the employer, or partially funded by both employer and employee. 401(K) plans, and similar retirement savings accounts are invested in a mutual fund, with either the employee making his own contributions, or the employee and employer mutually contributing. Often the employer will begin matching employee contributions within specific parameters once the employee has been with the company for a specified amount of time.

Paid paternity leave might be offered by a company so an expectant father can support his partner.
Paid paternity leave might be offered by a company so an expectant father can support his partner.

Another of the possible fringe benefits for workers are that businesses may offer their products or services to employees, either for free or at a discounted cost. Sometimes employees may also provide discounted goods and services to friends and family members. Some employers also offer discounted stock options or profit-sharing to employees as a fringe benefit.

Fringe benefits are typically insurance policies and other perks provided by an employer to employees as part of a comprehensive compensation package.
Fringe benefits are typically insurance policies and other perks provided by an employer to employees as part of a comprehensive compensation package.

Many employers customize fringe benefits to specific employees' lifestyles. Often workers can select these types of benefits from a cafeteria-style plan, or they are implemented when applicable to a specific employee's work or life circumstances. Options include adoption assistance, tuition reimbursement, paid travel expenses, transportation reimbursement, and financial or personal counseling.

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    • Some employers provide paid maternity leave.
      Some employers provide paid maternity leave.
    • Many employers offer some form of healthcare coverage as a fringe benefit.
      Many employers offer some form of healthcare coverage as a fringe benefit.
    • Vision insurance is an example of a fringe benefit.
      Vision insurance is an example of a fringe benefit.
    • Paid leave to take care of a seriously ill relative is one kind of fringe benefit.
      Paid leave to take care of a seriously ill relative is one kind of fringe benefit.
    • Paid paternity leave might be offered by a company so an expectant father can support his partner.
      Paid paternity leave might be offered by a company so an expectant father can support his partner.
    • Fringe benefits are typically insurance policies and other perks provided by an employer to employees as part of a comprehensive compensation package.
      Fringe benefits are typically insurance policies and other perks provided by an employer to employees as part of a comprehensive compensation package.
    • Access to a prescription drug plan may be offered in addition to health insurance.
      Access to a prescription drug plan may be offered in addition to health insurance.