Definition
Perquisite (Perk): A perquisite, often called a perk, is any additional privilege or benefit given to employees on top of their regular wages and salaries. These perks can range from common employee benefits like health insurance and pensions to exclusive executive benefits such as company cars, resort vacations, club memberships, reserved parking, and access to corporate aircraft.
Examples
- Company Car: Executives may be provided with a company car for personal and business use.
- Health Insurance: Employees often receive health insurance coverage as a part of their perks.
- Club Membership: High-level executives may be given memberships to exclusive clubs as part of their compensation package.
- Travel Benefits: Resort vacations or business-class travel tickets may be included.
- Reserved Parking: Special parking spaces allocated only for certain employees.
- Stock Options: Options to purchase company stock at a discounted price.
Frequently Asked Questions (FAQs)
What is the difference between benefits and perks?
Benefits are often necessary for employee well-being and employment retention and include things like health insurance and retirement plans. Perks, on the other hand, are supplementary and often tied to enhancing the employee’s lifestyle or convenience, such as gym memberships or company cars.
Are all employees eligible for perks?
No, perks are often tiered according to an employee’s role within an organization. Executive perks are generally more luxurious compared to those available to general employees.
How are perks taxed?
Most perks are considered taxable benefits by the IRS, and their value must be included in the employee’s taxable income. Specific taxation rules can vary depending on the nature of the perk.
Related Terms
- Fringe Benefits: Supplemental benefits provided to employees, which may include health insurance, life insurance, and retirement benefits.
- Employee Benefits: Various types of non-wage compensation provided to employees in addition to their normal wages or salaries.
- Compensation Package: The total of all remuneration and benefits an employee receives, including salary, perks, bonuses, and any other financial compensation.
- Stock Options: Financial incentives that give employees the right to buy company stock at a future date at a predetermined price.
Online References
Suggested Books for Further Studies
- “Total Rewards: Everything You Need to Know in 1 Hour!” by T. Willard Fair
- “Strategic Compensation: A Human Resource Management Approach” by Joseph J. Martocchio
- “The Compensation Handbook: A State-of-the-Art Guide to Compensation Strategy and Design” by Lance A. Berger and Dorothy R. Berger
Fundamentals of Perquisite (Perk): Human Resources Basics Quiz
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