Fringe benefits

Fringe benefits are additional perks or compensation that businesses offer employees on top of their regular wages.

Homebase Team

Min Read

What are fringe benefits?

Fringe benefits are additional perks or compensation that businesses offer employees on top of their regular wages. These benefits can be financial or non-financial and often help support work-life balance, employee health, or long-term retention. Think of them as the “extras” that help make a job more rewarding.

For small business owners, offering fringe benefits, even modest ones, can go a long way toward attracting great talent, improving morale, and building a loyal team. And if you're looking to simplify how you manage team benefits and compliance, sign up for Homebase to keep everything organized and accessible.

Examples of common fringe benefits

There are all kinds of fringe benefits you can offer, depending on your business size and budget. Some of the most common include:

Health insurance (medical, dental, vision)
Retirement contributions (401(k) or IRA matching)
Paid time off (vacation, sick days, personal time)
Commuter benefits (public transit passes, parking subsidies)
Tuition reimbursement or educational assistance
Employee discounts (especially for retail and hospitality)
Flexible schedules or remote work options
Childcare assistance or dependent care FSA
Wellness perks (gym memberships, wellness stipends, mental health resources)

Some fringe benefits are taxable, while others are tax-free. It depends on IRS guidelines and the benefit's structure.

Why fringe benefits matter

Offering a competitive salary is important, but the benefits often make someone choose (and stay with) a job. Here’s how fringe benefits help:

Boost employee satisfaction and retention
Support team health and well-being
Encourage loyalty and reduce turnover
Help small businesses compete with larger companies
Reinforce a positive company culture

And when employees feel supported beyond the paycheck, they’re more likely to be engaged and productive.

Are fringe benefits required by law?

Most fringe benefits are optional, but some are mandated depending on your state and the size of your team. For example:

Workers' compensation insurance is required in most states
Unemployment insurance is typically a must for W-2 employees
Health insurance is required under the Affordable Care Act for employers with 50+ full-time equivalent employees

Everything beyond these minimums, like paid time off, commuter benefits, or gym reimbursement, is up to you. But even a few well-chosen perks can make a big impact.

How to choose the right fringe benefits for your team

Not every benefit fits every business. Focus on what matters most to your team and your budget:

Ask employees what perks they value most
Consider offering flexible, low-cost options like scheduling flexibility or paid time off
Start small and scale as your business grows
Stay compliant by keeping accurate records and following IRS rules

The best fringe benefits are the ones your team uses and appreciates.

How Homebase helps you manage benefits and compliance

Homebase makes it easier to manage the behind-the-scenes work involved in offering benefits. Everything stays organized in one platform, from scheduling and time tracking to document storage and HR tools.

With Homebase, you can:

Track employee hours and eligibility for benefits
Store HR policies and benefit documents securely
Monitor time-off usage and scheduling fairness
Stay compliant with labor laws and benefits-related requirements

Explore Homebase’s HR and compliance tools to simplify how you manage fringe benefits and help your team feel supported without overwhelming your back office.

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