News for Small Firm Practitioners

Employee Benefits, Perks & The In Betweens

by Kelly Phillips Erb | Aug 26, 2015   ()

When it comes to business, it can be tough for a small business to match the salaries offered big companies. The solution? Focus on benefits and perks that make employees happy and are still cost and tax efficient. Opportunities to build loyalty are as individual as your business but here are some ideas to consider:

Fringe benefits. For federal tax purposes, a fringe benefit is a form of pay for the performance of services. This doesn’t have to be exclusively for an employee, it could be an independent contractor, partner or other person with whom you’re doing business. Generally, it’s a way of compensating someone with a benefit for doing something for you. Quid pro quo, if you will. And under the Tax Code, fringe benefits are generally taxable to the recipient. So that means that offering a fringe benefit to your employees – instead of just handing them a check – is still a taxable transaction.

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Source: Forbes
Source: Forbes

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