Any government contractor will tell you, there is no way to escape paying fringes. The best you can hope for is to get the most value you can for your dollar by maximizing your fringes.
Cost, Compliance, & Cash-in-lieu
- Also, contractors often regard compliance with a similar attitude as fringes- they are an unavoidable burden. In fact, these two reasons are among the most cited by contractors on why they do not go after government work.
- To avoid the complications and hassles that come with fringe benefit reporting some contractors choose to pay cash-in-lieu of fringe benefits. What these contractors don’t realize is the huge disadvantage they put themselves at by continuing that practice.
Fringe Benefits Advantage
- The “hidden” cost of using cash fringes is the additional tax burden. It can cost a contractor an additional 20-30% extra to avoid some of the complications that come with fringes. And in the modern SCA contract arena, that is the kind of additional expense that makes jobs not profitable.
- Contractors who provide “bona-fide” benefits gain an advantage besides not having the additional tax burden. The premium benefits that they can offer can be used as a tool to recruit and retain workers. Which is a problem many contractors are facing.
- AXIM’s Contractors Choice Plan provides never before allowed premium benefits paid for with fringes. One key feature is your employees get to choose which premium benefits they want from the package. This can increase the employee’s sense of ownership, and their morale and loyalty as well.
Better Benefits Offerings
- Rather than viewing your fringes as an unavoidable chore, you can turn them into an advantage. By using the SCA fringes to obtain a robust benefits package, you can recruit and retain more workers. All while not paying the extra taxes that come with “cash fringes.”
What it means to you (the contractor)
- The best part for a contractor is that these premium benefits can be paid for by fringe dollars. Not only does a premium benefits package provide financial security to their employees, but it’s also cheaper than doing a cash fringe because of the tax savings.
Employer-Paid Premium Benefits
- We saw a critical need for a better voluntary benefits package in government contracting, AXIM Fringe Solutions Group partnered with the best voluntary benefits providers in the country and got unbeatable rates that only government contractors can take advantage of.
- Instead of viewing fringe benefits like death and taxes, unavoidable things you have to deal with, smart contractors are finding useful and profitable ways to make benefits work for them.
- If you would like to know more about how AXIM FSG can help with fringe benefits, please contact us. Follow us on LinkedIn.