What Fringe Benefits Can Best Motivate Your Workforce?

What Fringe Benefits Can Best Motivate Your Workforce?

October 08, 2020
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When it comes to fringe benefits like health insurance, 401(k) matching, and life insurance, it can be hard to drum up much excitement among your staff. But by offering some lesser-known fringe benefits, from transportation reimbursement to qualified employee discounts and educational benefits, you may be able to appeal to a wider range of employees and provide a more comprehensive (and competitive) compensation package. Learn more about some underrated fringe benefits that could help inspire and motivate any small business's workforce. 

Qualified Employee Discounts

If your company offers a product or service, allowing workers to take advantage of that product or service for less than the retail price is a good (and inexpensive) way to say "thank you" for their hard work. A qualified employee discount can be provided directly (for example, by allowing employees to purchase products straight from your warehouse) or through a third party like an independent retailer.1 These types of discounts don't apply to stocks, bonds, or real estate, which are subject to special rules that don't permit them to be sold at a lower cost than they'd be sold to a non-employee customer.

Dependent Care Reimbursement

Regardless of whether you're located in a low, medium, or high cost of living area (COLA), childcare can quickly claim a substantial chunk of many employees' paychecks. Through a dependent care reimbursement program, your employees can save pre-tax funds directly from their paychecks and then use these funds to pay their childcare costs. Employers can also choose to contribute additional funds to employees' dependent care reimbursement funds as a part of their overall compensation package.

Qualified Transportation Fringes

Transportation fringes are flexible and can take several different forms. These can include: 

  • Public transportation passes or credits;
  • Qualified free or low-cost parking; 
  • Qualified bicycle or car-free commuting costs; and/or
  • Qualified transportation benefits for those who use a highway vehicle.

The right qualified transportation benefit for your business can depend on factors like your relative access to public transportation and ride-share options, whether parking facilities or street parking is available, and how the majority of your employees tend to get to work each day.

If you're wondering whether any of these fringe benefits could appeal to your employees (and help you retain top talent), please contact your financial professional. 

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal advisor.

LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

 

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1 www.irs.gov/publications/p15b#en_US_2020_publink1000193672