Cost Implications of Fringe Benefits on the Profitability of SMEs in the Cape Metropole

Small- and medium-sized businesses are encountering more difficulties in paying their staff as a result of insufficient capital funding. Therefore, the unequal distribution of fringe benefits among employees has a negative impact on the profitability of Small and Medium Enterprises in the Cape Metropole. Finding out how fringe benefits affected SMEs in the Cape Metropole was the purpose of this study. Data was gathered from ten small- and medium-sized businesses in the Cape Metropole, representing a sample of one hundred participants. The instrument for collecting data from respondents was a self-administered questionnaire, and a descriptive survey design was chosen. The paradigm used in the study was positivistic. Purposive sampling is the method used to choose study participants. Tables and graphs were created from the collected data after it was analysed using descriptive statistics in SPSS. The study’s findings showed that fringe benefits significantly impact a company’s profitability since they raise incentives and compensation, which lowers corporate profits. Employee benefits are therefore seen as an equal responsibility for the employer. Consequently, the performance of the organization may suffer if there are no fringe benefits offered. The study’s goal was to provide Small- and Medium-Sized Businesses with an understanding of how fringe benefits support improved work environments and the overall accomplishment of goals.