You've no doubt been at pains to cut costs during this recession. Now is the perfect time to review your hiring strategies and pay scales. More important, it's time to look at the fringe benefits you could and should be offering. Your company might save a bundle by replacing dollars with benefits.Have you ever heard someone say, "My job doesn't pay that well, but the benefits are great?" Usually this person smiles when she says it, and her employer is a smart entrepreneur.The beauty of fringe benefits is that you are generally providing something the employee would otherwise have to purchase, and you're doing so without incurring a tax liability for your company or the employee. These benefits are paid for with "pre-tax dollars."If, for example, you pay Tom $2,000 per month and let him get his own health insurance, he would have to pay for the health insurance with dollars shrunken by a tax bite. By the time you deduct federal income tax withholding, FICA, Medicare, and state income taxes, Tom's net pay would be about $1,500. (Approximately $500 or 25% of Tom's pay goes to taxes.) Then he pays $200 for a health insurance premium, and he's down to $1,300 net pay.But let's say you structure a salary of $1,800 per month and the company pays Tom's health insurance at a cost of $200 per month. Deduct 25% payroll taxes from Tom's check ($450) and his take-home pay is $1350. Tom is ahead by $50. In fact, because Tom is now on a group medical insurance plan, his savings on premium costs might be considerably more than $50. Individual plans are usually more expensive than group plans. They also may not be available to individuals with pre-existing conditions.As the boss, you save money as well. On Tom's base salary you have to cough up matching FICA and Medicare plus contributions into the federal and state unemployment funds. That's an additional cost of approximately 11%. Those taxes do not apply to the medical insurance you purchase for Tom. Using the numbers in the example given above, your company will save $22 in taxes. Multiply that by the number of employees you have, and you could save a tidy sum.There are countless other fringe benefits you can offer, such as achievement awards, adoption assistance, dependent care assistance, educational assistance, health savings accounts, group-term life insurance, retirement plans and moving expense reimbursements. Check with your tax pro or your payroll provider, or visit irs.gov and read Publication 15-B to find out which benefits work for your company. Many fringe benefits are 100% excluded from taxation. Others are partially excluded or completely taxable.Next time one of your employees is up for a raise, consider providing a mutually acceptable fringe benefit rather than cash. The tax savings will put a smile on both of your faces.Bonnie Lee is an Enrolled Agent admitted to practice and representing taxpayers in all fifty states at all levels within the Internal Revenue Service. She is also the author ofTaxpertise: The Complete Book of Dirty Little Secrets and Hidden Deductions for Small Business that the IRS Doesn't Want You to Know, from Entrepreneur Press. Follow Bonnie Lee on Twitter@BLTaxpertiseor email her firstname.lastname@example.org. Live stream her radio show every Tuesday at 1:00 PST by going toKSVY.organd clicking on Listen Now.