Perks - Definition & Meaning
What is Perks?
Perks or Perquisites refer to a privilege, benefit or a facility that an employee enjoys in addition to the regular salary. Usually, perks are attached to the position of the individual in the company and typically, higher the designation, greater are the perquisites offered.
For instance, the chief executive of a company could enjoy free use of the company car or a paid membership in a country club as a part of his perks. Perks could also include Houses, Insurance etc.
Perquisites according to the section 17(2) of Income Tax Act can be defined as:
• Accommodation facility or money as provided by employer
• Any sum paid as a mark of obligation
• Benefits or amenity that is granted free or at a reduced cost by the employer
• Any equity shares provided to the employee free of cost or t a reduced price
• Any sort of fringe benefit provided by employer
• Any sum of endowment to an approved superannuation fund by the employer to an extent it exceeds one lakh rupees
Below are listed some types of perks that employers offer. The list is in no way exhaustive:
• Provision for medical facilities
• Employee stock options
• Company provided car
• Counselling services
• Legal services
• Travel allowances
• Club membership
• Relocation expenses
• Credit cards provided by the company
• Medical expense reimbursement
• No and low interest loans
• Special dining privileges
• Company shares
• Reimbursement to children’s tuition fees
• Spouse travel
• Special living accommodations away from home
Advantages of paying perquisites:
• The motivation of the employees is increased as they feel important to the organization
• Employee productivity is enhanced
• The employee fells well taken care of by the organization and thus job satisfaction increases
• Employees feel secured with their job
• Employee retention is higher
• Employee citizenship grows
• Some perquisites are tax exempted this provides indirect monetary benefit to the employee
Hence, this concludes the definition of Perks along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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