Map of Prienai on In any discussion of worker compensation a basic question that arises is why do workers choose to take part of their compensation in the form of fringe benefits instead of a direct cash payment? Should not a rational worker prefer a cash payment of a dollar that can be spent as the worker sees fit rather than a dollar of, say, health insurance? The answer is that fringe benefits are the result of certain institutional features in the economy, in the American context the most important being the tax treatment of fringe benefit payments. Specifically, workers reap large tax advantages from fringe benefits because fringe-benefit payments are entirely untaxed. Fringe benefits in lieu of wage payments also offer significant gains to employers. First, firms benefit because some employer tax liabilities rise with higher wage and salary payments. For example, every dollar saved in wages lowers an employer’s Social Security taxes by 7.65 cents. In addition, fringe benefits such as private pensions and health insurance help induce workers to stay with a firm, thus reducing employee turnover costs. Map of Prienai 2016.
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Map of Prienai Holiday Map Q.