What defines a fringe benefit?

A fringe benefit is defined as an additional advantage or compensation that an employee receives beyond their regular salary or wages. This can include perks such as health insurance, retirement plan contributions, paid time off, and other non-wage compensations that enhance the overall value of the employment package. These benefits are intended to attract and retain employees, improve job satisfaction, and promote a healthy work-life balance.

In contrast, other options relate to forms of compensation that do not fit the definition of fringe benefits. For instance, a salary increase based on performance is a direct adjustment to wages rather than an additional benefit. Temporary bonuses for specific projects may provide extra compensation but are typically one-time payments rather than ongoing benefits. Mandatory overtime pay is a legally required compensation for hours worked beyond the standard workweek; it does not add to the overall benefit structure of employment but rather compensates for extra effort. Therefore, an additional advantage beyond regular salary aptly captures the essence of what constitutes a fringe benefit.