• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

MidwestHR

My WordPress Blog

  • Home
  • Services
    • Employee Benefits
    • HR Outsourcing
    • Payroll and Tax Admin
    • Workers Compensation
    • Retirement Services
  • About
    • Company Info
    • Leadership
    • Why We Are Different
    • What is a PEO?
    • Midwesthr Gives Back
    • Scholarship Award
  • Blog
  • Contact Us
  • Login
    • Client Login
    • Employee Login

Blog · Published: December 18, 2018 Updated: January 14, 2022

What Employers Need to Know About Fringe Benefits

Beyond money, there are other ways companies can compensate employees for their performance. Employee benefits, also known as fringe benefits, are provided in addition to salaries and wages. From health insurance to pet insurance and 401(k) to unlimited PTO, employers can offer a mixture of traditional and modern perks that are valuable on many levels.

Why are fringe benefits important?

By offering benefits that support the whole person, employers demonstrate they are invested in employees’ health, happiness and future. Improved employee wellness means fewer doctor visits and less time away which also positively impacts productivity. These employees aren’t just clocking in, they want the organization to succeed and share this enthusiasm with others. Benefits can create a workplace culture that motivates and inspires.

With a tight labor market, fringe benefits play an important role in differentiating your company from competitors as well. When recruiting and retaining top talent, a carefully curated benefits package can be a game changer for candidates and employees alike. Stay current on trends so your company can offer benefits that make you shine in your industry and amplify your corporate culture.

Are fringe benefits taxable?

All compensation paid to an employee is taxable unless specifically excluded by IRS code. Health insurance, education assistance, commuter benefits, athletic facilities, retirement planning services and many more are excluded. The IRS provides a comprehensive explanation and list of taxable and tax-free benefits in the 2021 Employer’s Tax Guide to Fringe Benefits. Taxable fringe benefits must be included as income on employee W-2 forms.

Must all employees get the same benefits?

Federal laws do not require equal benefits to all employees. Employers have discretion when structuring access to benefits and can base eligibility on a variety of employment-based classifications such as: tenure, full- or part-time status, exempt/nonexempt status, job group, department, etc. Benefit plan decisions cannot discriminate against protected groups. Even unintentional discrimination can be deemed unlawful and carry penalties and fines.

“To remain competitive in the talent marketplace, 1/3 of organizations increased their overall benefit offering in the last 12 months”1

As 2022 approaches, experts anticipate companies will continue enhancing benefits. Are your benefits luring the right talent? Or are your top performers being lured away? As one of the first certified professional employer organizations (CPEO) in the country,2 MidwestHR, a Chicago PEO, has partnered with clients for over 20 years and protected them against these types of threats. Our team of tenured HR experts monitor benefit trends, so you can focus on growing your business. Our completely customizable business model means you decide what HR help you need most and only outsource those areas to us. Give us a call at 630-468-9286 and learn more today.

1Society for Human Resource Management. (2017) Employee Benefits Remaining Competitive in a Challenging Talent Marketplace. Alexandria, VA: SHRM.

2The IRS does not endorse specific Certified Professional Employer Organizations. For more information, please visit www.irs.gov or our website at midwesthr.com.

Filed Under: Blog

Michelle Klenotich

Starting her PEO experience with MidwestHR in 2002, Michelle has evolved from the sole payroll processor to Director of Payroll. As Director, she leads a team of professionals with a combined payroll experience of over 60 years!

Previous Post: « What is Overtime and Should Employers Expect Changes in 2019?
Next Post: 2019 Changes to 401(k) and IRA Contribution Limits »

Primary Sidebar

Recent Posts

  • Can HR Software Help Your Company?
  • Top 10 Ways to Prevent Payroll Fraud
  • What are the Pros and Cons of Working With a PEO?
  • MidwestHR Giving Tree Returns for 2021
  • 2022 HR Law Changes and Trends

Footer

Follow US

  • Twitter
  • Facebook
  • LinkedIn
  • Yelp
  • BBB
  • UpCity
  • YP
  • Superpages
  • Clearly Rated

Navigation

  • Home
  • Contact Us
  • Careers
  • What is a PEO?
  • Healthcare Reform
  • Resource Center
  • Coronavirus COVID-19 Resource Center

Woodridge Location

MidwestHR, LLC
1200 Internationale Pkwy
#200
Woodridge, IL 60517
630-468-9286

Loop Location

MidwestHR, LLC
300 N LaSalle Dr
#1865
Chicago, IL 60654
630-468-9286

CPEO - IRS CertifiedNAPEOAudited Financials
*The IRS does not endorse any particular certified professional employer organization. For more information on certified professional employer organizations go to www.irs.gov.
© 2025 · MidwestHR, LLC · Privacy Policy · Terms · SUPPORTING BUSINESSES SINCE 1997