Definition
A perquisite, commonly known as a “perk,” refers to any non-wage benefit provided to employees over and above their regular salary or wages. These benefits are intended to enhance the overall compensation package and can encompass a wide variety of offerings, including company cars, health insurance, gym memberships, stock options, and more. The primary goal of perquisites is to increase job satisfaction, loyalty, and productivity among employees.
Examples
- Company Car: Some companies provide executives or long-term employees with a company car as an additional benefit.
- Health Insurance: Offering comprehensive health insurance plans, including dental and vision coverage, is a common perquisite.
- Gym Memberships: Employers may offer free or discounted memberships to local gyms to promote employee health and wellness.
- Stock Options: Companies might provide stock options, allowing employees to buy company shares at a fixed price.
- Remote Work Options: Flexibility in job location or the ability to work from home is increasingly becoming a sought-after perk.
Frequently Asked Questions (FAQs)
Q: Are perquisites taxable?
A: Yes, most perquisites are considered taxable income by tax authorities. The specifics of taxation depend on the type of perk and local tax laws.
Q: Who usually receives perquisites?
A: While perquisites can be offered to all employees, they are often more prevalent among higher-level executives, long-term employees, and individuals in key roles.
Q: Can perquisites be negotiated?
A: Yes, many perquisites can be negotiated, especially for roles that are difficult to fill or for key employees whose skills are in high demand.
Q: What is the difference between a perquisite and a fringe benefit?
A: Perquisites and fringe benefits are often used interchangeably, but fringe benefits generally refer to a broader category of non-wage compensations that can include perks as well as other types of benefits.
Q: How do perquisites impact employee performance?
A: Perquisites can significantly enhance employee motivation, job satisfaction, and retention, leading to better overall performance.
Related Terms
- Fringe Benefit: A type of benefit provided by employers to employees which can include perks but also encompasses other benefits like retirement plans and paid time off.
- Compensation Package: The total value of all benefits, including wages, perquisites, and other forms of compensation that an employee receives.
- Employee Benefits: Non-wage compensations provided to employees in addition to their normal wages or salaries, including healthcare, retirement benefits, and perks.
- Stock Options: A perquisite that gives employees the right to purchase company stock at a predetermined price.
- Retention Strategy: Strategies employed by organizations to retain valuable employees, often including perquisites as part of the approach.
Online References
- Internal Revenue Service (IRS): Fringe Benefits
- Investopedia: Perquisite
- Society for Human Resource Management (SHRM)
Suggested Books for Further Studies
- “Employee Benefits Design and Compensation (Irwin/McGraw-Hill Series in Finance, Insurance, and Real Estate)” by Bashker D. Biswas
- “Strategic Benefits: Designing and Implementing Effective Employee Benefits Programs” by Allen P. Robinson
- “The Perks of Being A Wallflower” by Stephen Chbosky (Just kidding!)
Fundamentals of Perquisite (PERK): Human Resource Management Basics Quiz
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