The aim of this study was to examine the effects of fringe benefits on employee loyalty in the context of university teachers. The study sample consisted of 100 university teachers who were randomly selected from both private and public universities situated in Khulna city of Bangladesh. Data were collected through a self-administered questionnaire survey. To test the study hypotheses, data were analyzed employing correlation and multiple regression analysis tools. Results of correlation analysis reveal that fringe benefits (insurance & retirement benefits, payments for time not worked, education & development opportunities, flexible working hours, and employee welfare benefits) are positively related to employee loyalty. Regression statistics shows that 25.6% variance of employee loyalty can be explained by the fringe benefits. The study findings also indicate that flexible working hours (β = 0.296, Sig. = 0.001) has the most significant contribution in explaining employee loyalty among the university faculty members employed in Khulna city of Bangladesh.