What are fringe and staff benefits?
There are many types of employee benefits, but they may have different tax characteristics. For tax purposes, the benefits in the Edenred range are divided into fringe benefits and staff benefits. So what exactly do these mean – read on to find out!
Offering employee benefits with a targeted payment instrument
Where Edenred enters the employee benefits picture is in the definition that fringe benefits and staff benefits must be made available to employees through a 'targeted payment instrument'. The Tax Administration* defines this as a payment instrument "whose use is restricted to predetermined purposes only. Targeted payment instruments may be paper and electronic vouchers, payment cards, internet, and mobile services and applications." (Translated)
Fringe benefits include, for example, a meal benefit (lunch benefit) and a travel ticket (commuting benefit). The Tax Administration defines on its website as follows:*
"For tax purposes, a fringe benefit is the non-monetary consideration paid by an employer to an employee for work. In other words, a fringe benefit is a good (goods or services) made available and paid for by the employer to the employee. Such fringe benefits are meal benefits and travel tickets." (Translated)
For example, sports and culture, and massage benefits are staff benefits. The Tax Administration defines on its website as follows:*
"Staff benefits are benefits provided by an employer to its employees or retired employees on the basis of their employment or service, but which do not constitute compensation for work. From the employer's point of view, the purpose of providing staff benefits is often to convey a positive employer image or indirectly to promote work performance, for example by maintaining employees' ability or motivation to work." (Translated)
"A staff benefit is different from a fringe benefit. In taxation, a fringe benefit refers to compensation (salary) received from the employer for work in a form other than money based on the employment relationship. Fringe benefits are typically part of the terms and conditions of employment. It can be agreed with each employee individually and is always taxable as earned income (salary) for the recipient." (Translated)
Edenred's comprehensive range of employee benefits offers staff a wide range of benefits to restore and energize their days - both at work and in their free time.