Lifestyle And Fringe Benefits: Definition, Examples And How They Work

Employee rights have come a long way over the past century. Nowadays, much more importance is placed on how satisfied employees are and how healthy their work environment is. This is especially true in the United States, where a good work-life balance is seen as key to employee productivity and overall happiness.

One way to achieve this balance is by offering employees lifestyle and fringe benefits. Such benefits allow employees to enjoy incentives on top of their agreed-upon salary, such as discounts on goods and services, flexible working arrangements, and even paid time off to travel.

In this article, we will explore the definition of lifestyle and fringe benefits, give some examples of each, and explain how they work. Let's dive in!

What Are Lifestyle and Fringe Benefits?

In a nutshell, lifestyle and fringe benefits are perks that employers offer employees in addition to their regular paystub. You might think of them as "extras" that make employees' lives a little easier and more enjoyable.

Lifestyle benefits can include anything from discounts on goods and services to paid time off to travel. Fringe benefits, on the other hand, are perks that fall outside of employees' regular working hours. This can include things like flexible working arrangements, telecommuting, and even paid leave to care for a sick family member.

How Do Lifestyle and Fringe Benefits Work?

Lifestyle and fringe benefits work by giving employees incentives to stay happy and productive at work. By offering employees discounts on goods and services, for example, employers can help them save money on the things they need and want. This can include anything from groceries to gasoline to clothing.

Fringe benefits, such as flexible working arrangements, are also a great way to show employees that you care about their work-life balance. By allowing employees to work from home or come in late/leave early on occasion, you are giving them the freedom they need to manage their own time. This, in turn, can help reduce stress and improve overall productivity.

Ancillary and Necessary Benefits

When discussing fringe benefits, they are often sorted into two categories: ancillary and necessary. Necessary benefits include anything the employee would have to pay for out of pocket if the company did not offer it. This might include things like health insurance, dental care, and vision coverage.

Ancillary benefits, on the other hand, are not essential for employees to have – but they still come in handy and improve their quality of life. This might include things like gym memberships, parking passes, or even pet insurance.

Some companies offer one or the other, some offer both, and others fail to offer any benefits at all. It really depends on the company and what they feel is important to their employees.

Examples of Lifestyle and Fringe Benefits

Now that you know what lifestyle and fringe benefits are, let's take a closer look at some of the most common examples.

Necessary Benefits Examples

• Health insurance. This might include things like doctor visits, prescription drugs, hospital stays, and more.
• Dental care. Covers dental exams, cleanings, fillings, root canals, and more.
• Car and home insurance. Protects employees and their families in case of an accident or natural disaster.
• Life insurance. Pays out a lump sum to beneficiaries in the event of the employee's death.
• Vehicle and travel allowances. Covers the cost of using a personal vehicle for business purposes, as well as travel expenses like airfare and hotel stays.

Ancillary Benefits Examples

• Gym memberships. Allows employees to use the company's gym or health club facilities at a discounted rate.
• Parking passes. Grants employees access to reserved parking spots near the office.
• Telecommuting. Allows employees to work remotely on occasion, provided they have the necessary equipment and broadband connection.
• Paid time off to travel. Pays for a certain number of days each year that employees can use to travel for leisure purposes.
• Tuition reimbursement. Covers a portion of employees' college or university tuition costs.
• Child care services. Provides access to affordable child care services near the office.
• Eldercare services. Offers access to affordable elder care services near the office.
• Pet insurance. Covers the cost of veterinary bills, medication, and other pet-related expenses.

Why Offer Fringe and Lifestyle Benefits?

At face value, providing these benefits to employees doesn't appear to make much sense. After all, why would employers want to spend extra money on perks that don't seem to directly benefit the company? They already need to generate W-2 forms and pay a substantial tax rate on each employee. Why spend more?

There are actually a few good reasons for doing so. First and foremost, happy employees are more productive employees. By offering lifestyle and fringe benefits, you are showing your employees that you care about their well-being and are willing to do what it takes to make them happy. This, in turn, can lead to increased productivity and a more positive work environment.

Another reason to offer these benefits is that they can help attract top talent. In a competitive job market, it's important to stand out from the crowd, and offering fringe benefits is one way to do that.

By showing potential employees that you care about their well-being, you are indicating that you are a company that values its employees. This can be a major selling point for talented candidates.

Which Benefits Are Right for Me?

The benefits that are right for you largely depend on your personal needs and preferences. If you are a healthy person who doesn't need health insurance, for example, then you might not need that particular benefit. However, if you have a family and rely on your employer's health insurance plan, then it would be essential for you.

The best way to figure out which benefits are right for you is to speak with your employer. They should be able to provide you with a list of the benefits they offer and help you decide which ones are best for you.

If there are benefits you feel you’re entitled to, but your employer doesn’t currently offer them, there’s no reason not to set up a meeting and make your case.

Why Won't My Employer Offer Me Benefits?

Unfortunately, not all companies have caught onto the idea that happy employees are productive employees. If your employer doesn't offer any benefits, it might be because they don't see the value in doing so – or they haven't budgeted well enough to offer them.

The best way to approach this situation is by speaking with your employer. Let them know that you would be interested in having access to some of the common benefits listed above, such as health insurance, dental care, and vision coverage. If they still don't budge, you might want to consider looking for a new job that does offer these benefits.

Keep in mind that your employer is required to offer you paid leave and other such benefits under the Family and Medical Leave Act (FMLA). This law guarantees employees a certain number of days off each year to take care of sick family members or themselves.

The Bottom Line

Lifestyle and fringe benefits are perks that employers offer employees in addition to their regular salary. These benefits can include anything from discounts on goods and services to paid time off to travel.

Said benefits are a great way to show employees that you care about their well-being and are willing to do what it takes to make them happy. This, in turn, can lead to increased productivity and a more positive work environment.

If you're interested in offering lifestyle and fringe benefits to your employees, be sure to speak with your employer. They should be able to provide you with a list of the benefits they offer and help you decide which ones are best for you.