What are fringe benefits?
Author: Alice Gilman
Fringe benefits are cash payments or noncash items that are provided to an employee in addition to his or her regular pay and bonuses. Fringe benefits are subject to income and FICA tax withholding and FUTA, unless a specific provision of the Internal Revenue Code excludes them from taxation. If a fringe benefit is taxable, the fair market value, less any amount the employee pays for that item, must be valued, taxed, withheld upon and reported as income on the employee's Form W-2.