Benefit Legal Definition: Everything You Need to Know
In contracts, the benefit legal definition refers to the right acquired or profit obtained from the contract.3 min read
2. Employee Benefits
3. The Benefit of the Bargain Rule
4. Benefits and Taxation
In contracts, the benefit legal definition refers to the right acquired or profit obtained from the contract. In workers compensation insurance, a benefit is a payment the insurance company pays to an employee who is injured or killed as a result of an accident on the job. In taxation, a benefit is deduction, exclusion, or credits that the government avails to qualified taxpayers to reduce their tax burden. Fringe benefits in employment are rights given to employees in addition to their wages or salaries. Benefits can also be paid out by the government to property owners whose property has been damaged or appropriated by the government for public use.
Benefits in Assessing Damages
In assessing damages for private property that has been taken over or has been damaged because of public use, special benefits are those benefits that are due to the owner of the property in question because of the uniqueness of the property while general benefits are benefits that are due to community in general because of their location in the vicinity.
In workers compensation Insurance, a benefit is a payment the insurance company gives out to an injured person or his family as a result of fatal and non-fatal injuries the person got while on the job.
Employee benefits are also called fringe benefits and are normally given by employers to their employees in addition to the salary. Many employers have benefit packages in order to attract and retain employees. Fringe benefits include:
- Health insurance
- Paid Leave
- Disability insurance
- Profit sharing
- Retirement benefits
- Life insurance
- House and vehicle leasing benefits
Fringe benefits are usually taxed on both the side of the employer and the employee, although the benefits are tax-deductible for some employers. Fringe benefits are a very effective tool of attracting and retaining employees. Employers should ensure that they can afford the benefit packages in the long run. Companies that initially offer benefits and later withdrawal of such benefits during periods of economic hardships can encounter issues with loss of morale and departure of some employees.
The Benefit of the Bargain Rule
The benefit of the bargain rule is a legal concept which states that the party to a contract that breaches the contract should pay the disgruntled party an amount that puts the disgruntled party in the same position that he would have been in if the contract had been performed. The principle is used in a number of contexts. It may help buyers who have been defrauded by sellers to recover from the seller damages equivalent to the amount of money they lost because of misrepresentation of the property's value by the seller.
Some states have adopted a form of the benefit of the bargain rule where a complainant is given an amount that is equal to the difference in the value of what he got and what he was supposed to get if he had not been defrauded.
Benefits and Taxation
A tax benefit is a deduction, tax credit, or tax exclusion which is intended to reduce the amount of money a taxpayer pays in tax. A tax benefit usually provides relief to the taxpayer while also helping the government or another entity.
For example, in an attempt by a state government to reduce environmental pollution due to fossil fuels, the government may offer an energy tax credit to people who use solar energy instead of fossil fuels. Qualified taxpayers can save money on taxes when they install solar energy in their houses or if they buy solar-powered vehicles. The credit reduces the tax burden on the consumer while at the same time helping the government to reduce the demand for fossil fuels.
Tax deductions fall into two broad categories:
- Itemized deductions are expenses that the IRS has allowed certain taxpayers to exclude from taxes. The taxpayer can list such expenses on his income tax return, legally excusing himself from his obligation to pay taxes for those expenses.
- Standard tax deductions, on the other hand, reduce the taxable income of the taxpayer by a standard amount of money. The standard tax deduction for 2018 is $12,000.
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