Skip to content

Employer’s Complete Guide to Employee Benefits & Compensation

22 min read
employee benefits

Benefits are any perks offered to employees in addition to salary. Here’s what you should know about employee benefits and compensation.

Attracting top talent is at the top of every HR manager’s agenda.

One way of doing this is by building an appealing employee compensation package. This will help attract top-quality workers, as well as generate and maintain a happy and healthy workforce.

Whereas employers are looking to get the best out of employees, employees are now looking to get more out of employers.

As a result, employee benefits and rewards programs are becoming increasingly common. They are now a useful bargaining tool when attracting and retaining new hires.

In this post, we’re going to look at the main benefits and rewards employers offer their workforce today.


Employee Benefits Program & Employee Perks

You might be wondering, “What are employee benefits?”

Benefits are non-salary compensation, also known as perks or fringe benefits. They are provided to employees outside of salaries and wages.

Perks and benefits for employees may include medical insurance and profit sharing, as examples. Businesses offer these with the aim of creating a more alluring work package for their employees.

List of employee benefits & employee rewards programs

So, what are the 4 major types of employee benefits?

The four main types of benefits are medical, life, disability, and retirement.

career plan

What are the 4 major types of Employee Benefits?

Benefits for workers? There are quite a few!

As mentioned, the four main types of benefits are medical, life, disability, and retirement. Let’s take a closer look at these.

Medical Benefits

Rises in the cost of healthcare have meant that medical coverage is a must-have employee benefit an employer can offer.

For example, this can include:

  • Medical Insurance – Typically, this coverage includes hospital visits, attendance at doctor’s surgeries, and prescriptions.
  • Dental Insurance – This may cover annual exams, cleanings, and X-rays.
  • Vision Insurance – Increasingly common, this insurance usually covers routine eye exams, prescription glasses, and contact lenses.

Employers typically pay all, or at least a part, of these insurance premiums for employees.

One should note that employers are legally required to provide healthcare to employees who work 30 or more hours per week.

Life Benefits

Also common are Life and Accidental Death & Dismemberment (AD&D) Insurances.

  • Life Insurance – If an employee passes away, this insurance provides a payment to the family of the deceased. This is typically for funeral costs and assistance with ongoing living expenses. The amount is usually equal to the employee’s annual salary.
  • AD&D Insurance – This benefit provides money to the employee or their family if the death or dismemberment was due to an accident.

Disability Benefits for Employees

Employers can offer short-term or long-term disability insurance to their employees. These types of benefits are particularly helpful to workers who have been injured or fallen seriously ill and are unable to work as a result.

  • Disability Insurance – This covers expenses up to a certain amount during the time workers are unable to work.
  • Accident Insurance – This helps employees with payment regarding any medical costs resulting from accidental injury. It typically includes treatment, hospital stays, and medical exams.

Retirement Benefits

Retirement benefits are funds that are put aside for employees to use as an income or pension when they finish work.

401(k) Retirement Plan – An attractive benefit to any employee, this retirement savings account permits workers to put aside a portion of their salary into long-term investments.

In many cases, employers contribute an amount to their employees’ retirement plans too.

employee compensation

2. Rewards Programs

Now we’ll look at common employee rewards programs, also known as employee recognition programs, usually given to acknowledge top performers.


Employees reward employee accomplishments and high-performance reviews with bonuses.

Recently, it has been more common for businesses to not only reward individuals but group efforts with monetary bonuses. They reward contributions made to corporate performance at a group, departmental or company-wide level.

Stock Options

Employee stock option plans were previously offered to upper management of large companies.

Now, they are more common with a much wider range of employees. These programs offer employees the ability to buy a number of the company’s shares at a fixed price for a specific time period, typically around 10 years.

Therefore, they are a good motivator and generally keep employees loyal to the company for longer periods of time.


Profit-sharing plans, similar to retirement plans, offer an employee a share in company profits.

Also known as a deferred profit-sharing plan (DPSP), it allows the worker to receive a portion of the company’s profits, usually equal to a percentage of the employee’s salary. This is handed out annually and gives employees a sense of ownership in the business.

Aside from these common employee benefits packages, there are other perks employers can offer. 

Nonqualified Deferred Compensation Plan

Putting a worker’s salary into a Nonqualified Deferred Compensation (NQDC) plan is increasingly offered as employee compensation and a great tool in recruitment. It allows the employee to receive wages, bonuses, or other compensation at a later time.

Similar to a retirement plan, these earnings are often deferred until retirement.

Doing this provides the worker with more income in the future, usually when they have entered a lower tax bracket than before. This means that the tax they pay whilst working is at a reduced rate.

There are some important requirements to take note of here.

US tax law requires that the NQDC plan is in writing. This means that the document specifies the amount to be paid in the future, the payment schedule, and the event that will result in payment.

Events of this nature include:

  • a fixed date
  • separation from service (e.g., retirement)
  • a change in ownership or control of the company
  • Disability
  • Death
  • an unforeseen emergency

Furthermore, workers must make an irrevocable choice to defer compensation before the year in which the compensation is earned.

The tax benefits that can be received from NQDC will only be realized once these requirements have been met.

Employee Discount

With the ever-increasing cost of living, many workers today are experiencing financial stress.

Employers recognize this and have found ways to offer certain benefits to employees to help relieve this stress.

One of these ways is to offer staff benefits in the form of employee discount programs.

Although companies provide the 4 main types of benefits, the majority of regular workers are unlikely to need them.

Many people may never have an accident or dismemberment during their lifetime, so what good are these benefits to them?

Discount programs, however, offer workers access to a variety of consumer products and services at a discounted price every day.

If, as an HR manager, you find yourself asking the question “What benefits do employees want?”, this may be part of the answer.

Some of the best employee discounts offer workers reductions on everyday items such as groceries, clothing, and electronics.

Bigger discounts can also include hotels and vacations, movie tickets, sporting event tickets, cars, cable services, beauty and spa treatments, and financial services.

These benefits are particularly attractive to employees as the majority are likely to actually use them. This can be a powerful recruitment and retention tool for any employer.

So, if you’re looking to add benefits to your company, you might want to think about starting with discounts.

Employee Wellness Programs

One of the most common employee benefits in the USA is employee wellness packages. These are typically non-financial rewards that employers.

Non-financial benefits are also referred to as “emotional salary”, as it refers to emotional gains rather than monetary benefits. Their ultimate aim is to increase employee happiness, motivation, and loyalty.

So what are some examples of wellness programs?

On-site fitness centers

Companies like to show their workforce that they care about their well-being. For this, they have installed fully-equipped on-site gyms for workers to use. It helps keep workers fit and healthy.

Wellness adventures

To keep workers active and engaged with the team, many companies organize wellness adventures and activities. This can include golf lessons or laser tag.

Generally speaking, the types of activities included in this are kept broad to appeal to a wide range of people.

The primary focus is on having fun but they have hidden team-building benefits.

Lunch and healthy snacks

It is now common for companies to offer longer lunches than before.

Whereas in the past, it was typical to only offer 30 mins for a speedy lunch, many businesses are now offering up to 90 minutes. This is so employees can have more time for a relaxed lunch, and if the employees wish, time to do sport.

What’s more, companies are now offering free healthy snacks, such as fruit, in their offices. This is an attempt to keep employees happy and healthy.


One of the newest company perks is to offer spa or health treatments to workers. These range from massages and facials, to acupuncture and therapy.

Nowadays, these non-monetary rewards are growing in popularity among businesses.

Furthermore, keeping employees happy, healthy, and relaxed is key to increasing their productivity and motivation.

perks and benefits for employees

Work Flexibility Benefits

This is another typical employee benefits plan that is gaining more momentum.

More employers are offering their workers a flexible benefits plan as part of their benefits package. This allows employees to work a flexible schedule to suit their needs.

An attractive benefit, many HR managers are presenting potential recruits with this perk as part of their job offer.

So why offer a flexible working schedule to employees as a benefit? There are a number of reasons.

Employee flexibility

Employees relish flexibility at work as it helps them maintain a good work-life balance. They can meet family needs and personal obligations if they have the flexibility to do so from their job. Workers can choose the hours they work.

Not everyone is an early bird, some people work better at night. Therefore, this flexibility presents workers with the option to work whenever it suits them.

Flexible working hours mean a worker can attend their yoga class, pick up their kids from school or go to a midday doctor’s appointment.

All of this, without the hassle of organizing it around a rigid work schedule.

Employee childcare costs

Flexibility is also one of the best employee benefits, as many workers have children and need to tailor their working hours to their childcare obligations.

Childcare is expensive, but so are living costs. This makes life with a family very expensive.

Yet, if workers have flexibility with their hours, they may be able to manage a timetable where reduced childcare time or no childcare time at all is needed.

The result is two full-time incomes with little or no childcare costs.

Employee commitment

Flexible work and the chance to work from home a number of days a week is particularly attractive. It provides employees with a sense of personal control over their life and the environment. This leaves workers feeling empowered and building commitment to the company. Great for employees, great for employers.

What Are Fringe Benefits?

Although we’ve touched on some of them, let’s take a closer look at what fringe benefits are and how they factor in to an employee compensation plan.

Fringe Benefits Definition

Federal law states that you must pay all your full-time employees certain benefits on top of their standard pay. This includes Medicare and social security, unemployment insurance, workers’ compensation insurance, and Family and Medical Leave Act (FMLA) protections (although workers’ compensation rates vary according to local or state laws). Most employers also offer a selection of salary and fringe benefits.

Fringe benefits are a form of compensation that supplement an employee’s standard rate of pay. They can be made in the form of property, services, cash, or cash equivalents. Common examples include retirement, medical, dental and vision insurance, premiums, training and tuition reimbursement, life insurance contributions, use of a company car, meal subsidization, housing allowance, educational assistance, vacation pay, meals and employee wellness plans.

An attractive benefits and compensation package can be a great way to attract and retain top talent. It can also be a great way to motivate and reward staff and encourage them to be more productive. However, you need to be clear about which benefits are taxable so that you calculate your payslips in accordance with the law. With a vast range of benefits to choose from, this can sometimes be confusing.

Fringe Benefits Examples

Generally speaking, salary and fringe benefits fall into three categories: legally required benefits, taxable benefits, and non-taxable benefits.

Here are some of the most common taxable fringe benefits examples. If you offer any of these perks, then you need to make sure you apply tax to any totals added to your employee payslips.

Life Insurance 

The first of the fringe benefits examples we are going to discuss is life insurance.

Many companies offer group term life insurance policies to their employees for free. With a group policy, if an employee dies, that lump sum benefit would go to the employee’s beneficiary. Sometimes the benefit can be paid as a pension, but it’s down to how the employer has set up the cover.

According to the IRS, life insurance premiums for a policy of more than $50,000 are classified as a fringe benefit and create a taxable income for the employee.

Retirement Plan Contributions

The next of the fringe benefits examples we are going to look at is retirement plan contributions.

Some employers match their employee 401(k) paycheck deferrals, whilst others make qualified contributions to retirement plans. These contributions can be pretax or after tax. An after-tax contribution is a deposit into a retirement account of money that has been taxed in the year in which it was paid into the account.

Education Assistance

Another common fringe benefits example is education assistance.

In this case, employers usually offer tuition reimbursement for the completion of a college course or an advanced degree program. This fringe benefit also usually involves offering flexible schedules so that employees can balance their education with their work obligations. Some companies also offer educational assistance programs (such as scholarship grants) for strategic learning and development purposes.

Bonus Compensation

The final fringe benefits example we are going to discuss is bonus compensation schemes.

This is a financial reward given to an employee in addition to their regular salary. You would usually offer an employee a bonus when they meet certain targets or at the end of the financial year. They can be a great motivational tool, especially for those employees working in sales. Employee bonus schemes are generally a positive strategy and can provide real motivation. They can also help employees identify with the company and align them with its operational objectives.

These bonuses are classified as taxable income and must be declared in an employee’s annual tax return.

Is Holiday Pay a Fringe Benefit?

One question that people often have is whether or not holiday pay is classed as a fringe benefit.

Having time off work is vital for the health and wellbeing of every employee. This is why, although there is no legal requirement, most employers include paid time off (PTO) as a fringe benefit in their employee contracts. This usually includes PTO for a set number of vacation days, sick leave, and time off for personal circumstances, such as family emergencies, funerals, and medical or parental leave.

Although countries like France, Germany, Spain and the UK see a total of around 30 days of PTO per year, the average for full-time workers in the USA is 10 vacation days per year, depending on company policy.

Aside from vacation days, many companies also pay employees for certain holidays, such as Christmas Day. Others that work in hospitality or retail, for example, are sometimes offered extra pay or overtime if they work on official holidays. However, companies that offer holiday pay need to ensure they offer it equally to avoid discrimination based on race or religion.

How to Calculate Fringe Benefits

Whichever fringe benefits you offer your employees, you need to make sure you take them into consideration when you calculate payroll each month. This includes withholding the right percentage of payroll tax. It also involves including salary and fringe benefits as supplemental income on an employee’s W-2. The IRS provides guidance on fringe benefits in a publication titled Employer’s Tax Guide to Fringe Benefits.

In a nutshell, you should not classify fringe benefits as direct income. Instead, you should treat them as extra compensation. You also need to consider that some benefits are subject to employment tax. However, you can use special rules to withhold, deposit, and report employment taxes.

As a rule, any fringe benefit you provide is taxable and you must include it in an employee’s pay unless the law specifically excludes it. Exclusions include anything that would be difficult to account for financially, such as refreshments or snacks, or anything gifted “in kind” (known as de minimis benefits), such as a birthday gift card. Other salary and fringe benefits not considered taxable include health insurance, group term life insurance, stock bonus plans, transportation benefits, and employee discounts.

For intangible fringe benefits that are taxable, such as vacation days, you need to work out their dollar cost. You then need to add up the cost of all an employee’s fringe benefits for the year (including payroll taxes paid) and divide it by the employee’s annual wage or salary. Then, multiply the total by 100 to get the fringe benefit rate percentage.


Government Employee Benefits Plan vs Employer-Provided Benefits

Whereas health insurance, flexible working hours, discounts, and wellness programs are employer-provided benefits, there are also some benefits available from the government. Let’s take a look at some of these now.

Federal Employees Health Benefits Program (FEHB)

Through this program, federal employees, retirees, and their families have access to a variety of health insurance plans.

More than 200 plans participate in the program. This way, employees are able to select the plan that best fits their individual healthcare needs.

Disability and workers compensation

These benefits ensure that a sick or injured employee can continue receiving their salary until they can go back to work. This is typically a proportion of their normal pay.

Every state has its own requirements for employers.

So you’ll need to check with your state government to see what the exact requirements for you are.

Consolidated Omni-Budget Reconciliation Act (COBRA)

Under COBRA, the federal government requires that companies extend medical benefits to former employees and their families. This law applies to companies with 20 or more employees and involves a coverage period of up to 18 months after the termination of a contract of an employee.

Family and Medical Leave Act (FMLA)

This Family Medical Leave Act requires employers to provide maternity, paternity, and adoption leave.

Yet, according to the labor regulations, an employer isn’t required to pay this leave.

Sick leave

Although in the past this benefit was employer-provided, it is increasingly mandated by jurisdictions, both state and local, that employers provide sick time.

With that said, it is becoming commonplace for employers across the country to have a paid time off (PTO) policy to support workers.

So what is the difference between government and employer-provided perks?

Whereas government perks are mandated by law, those provided by employers are not.

Employer benefits are not mandatory and are subject to changes. They are personalized to and by each company and therefore vary depending on each organization.

Employee Benefits Services – Which Companies are Offering the Best Employee Benefits Packages?

You might be wondering which companies offer the best corporate perks at work? Well, let’s take a look at some of the best examples.


Starbucks employee benefits packages are plentiful. They have a PTO policy, offer health coverage and parental leave, among others.

One of their most attractive benefits, in addition to their PTO allowances, is the Starbucks partner discount. This provides partners with a 30% discount on purchases of beverages, merchandise, and food at company outlets.


Chipotle, the Mexican grill restaurant chain, offers a Chipotle tuition reimbursement benefit. This employee benefit allows eligible workers reimbursement up to $5,250 a year in tuition.

Employees are eligible for the program after 120 days of employment.

Indeed, this benefit is extremely attractive to the chain’s workers, two-thirds of which are first-generation college students.


FedEx has a number of perks, but its most attractive benefit to employees is its discounts.

The company’s employee discounts include vacations, electronics, cell phones, movie tickets, and new and used cars among others. These are particularly helpful in attracting and securing top talent.

Small Business Employee Benefits

If you’re a small business, one of the most effective ways to build an engaged workforce is by offering a range of small business employee benefits. Although many benefits will involve a degree of cost for your business, they are well worth the investment. In fact, the right employee benefits package can have a direct impact on your performance levels and the bottom line of your business.

So, which benefits should you be offering?

There are mandatory employee benefits that you have to provide your employees with, such as those established by the FLSA. However, most companies also offer additional voluntary employee benefits already covered in this article, such as fringe benefits, paid leave, wellness programs, and employee resource groups. These help you attract top talent to your business and nurture a loyal, productive and motivated workforce.

Small Business Employee Benefits Required by Law

The first thing to consider when you design your employee benefits packages is making sure you understand all state and federal legal requirements for employers.

Specifically, you need to make sure you offer the following mandatory large or small business employee benefits:

  • Social Security taxes. You are legally required to pay Social Security and Medicare taxes at the same rate as your employees. This ensures that you comply with the Federal Insurance Contributions Act (FICA). Make sure you are aware of all Social Security and Medicare Withholding Rates.
  • Unemployment insurance. Depending on the requirements of your state, you may need to withhold state unemployment insurance taxes for your employees. You must also pay Federal Unemployment Tax Act (FUTA) taxes for all your employees.
  • Disability insurance. Certain states require you to provide partial wage replacement insurance to eligible employees for any non-work-related sickness or injury.
  • Overtime pay. Under the terms established by the FLSA, you must pay overtime pay to non-exempt employees if they work over 40 hours in a working week. The minimum rate for overtime is one-and-a-half times the employee’s usual hourly wage.
  • Family and medical leave. Make sure you comply with all employer requirements established by the Family and Medical Leave Act (FMLA). For example, you must provide employees with up to 12 weeks of job-protected and unpaid leave during a 12-month under certain circumstances. This includes the birth and care of a child, the care of an immediate family member, or if an employee is diagnosed with a serious health condition.
  • Jury duty. You are legally required to offer unpaid leave to any employee that is called for jury duty. What’s more, in certain states you must pay for this jury leave. Make sure you’re up to date with the laws in your state.

hr kpi reports demo

Voluntary Small Business Employee Benefits Examples 

Once you’ve covered all mandatory employee benefits, you can focus on the voluntary perks that you will include in your employee benefits packages. This will help you create appealing packages that attract top talent to your organization. It will also help you nurture a healthy, happy, and motivated workforce. And this, in turn, will have a direct impact on the performance and productivity of your business.

There are many small business employee benefits that you might choose to include in your packages. The right ones for your organization will depend on a number of aspects, including the size of your business and your budget.

Here are a few examples of employee benefits that you could offer your employees.

Paid leave 

Although there is no federal requirement for you to offer paid leave to your employees, many states have created laws to enforce it. For example, 11 states have paid sick leave laws (including California, Colorado, and Connecticut), and 8 states have paid family and medical leave laws (including Massachusetts, New Jersey, and New York).

Even in those states where it is not a legal requirement, many organizations choose to include some form of paid leave in their employee benefits packages. This might be in the form of paid vacation, personal days, or national holidays.

Here are a few specific types of paid leave you might consider offering your employees:

  • Medical leave. If an employee is sick, or they’re caring for a family member who’s sick, they may need an intermittent leave of absence. This leave also covers doctor’s appointments or hospital stays.
  • Bereavement leave. You can offer this when a member of an employee’s immediate family passes away.
  • Personal leave. You can offer this type of paid leave for employees to use as they see fit. This can include religious holidays, birthdays, anniversaries, or emergencies.
  • Parental leave. This includes any time a person needs to take time off to care for their children. This could be paternity, or maternity leave, as well as adoption or fostering leave.
  • Vacation leave. Vacation PTO is one of the most common types of leave. It is the time an employee spends away on a trip or vacation.

Another option to consider is whether or not you will offer unpaid time off. For example, many small businesses offer unpaid extended family leave, even though it’s not required under the Family Medical Leave Act until a business reaches 50 employees. This can be a high-impact, low-cost benefit.

Fringe benefits 

Fringe benefits are additional perks that supplement an employee’s pay. You can offer fringe benefits in the form of property, services, cash, or cash equivalents. Common examples include retirement, medical, dental and vision insurance, training and tuition reimbursement, life insurance contributions, use of a company car, meal subsidization, housing allowance, and educational assistance.

Here are a few specific examples of fringe benefits that you could offer:

  • Medical insurance. You might include both health and dental coverage. Although this is one of the most expensive fringe benefits, it’s usually the most important one for employees. Many small business employers only pay a percentage of the premium, and the rest is covered by employees through their paycheck deductions. Others choose to pay the entire health insurance premium for all employees. If you choose to offer healthcare insurance, the Affordable Care Act (ACA) requires you to offer it to all eligible employees.
  • Retirement savings plans. Approximately half of all small businesses in the US offer retirement savings plans to their employees. The most popular plan is a 401(k). This retirement savings plan enables employees to contribute a certain percentage of their pre-tax salary into an account that is managed by a 3rd-party investment company. These contributions are tax-deductible, and you can claim certain tax credits as an employer, too.
  • Training and tuition reimbursement. This fringe benefit enables employees to participate in educational programs for free or at a reduced cost. This benefit not only enables you to apply for tax deductions, but it also sends out a clear message that you care about the professional development of your employees.

Stock options 

Stock options are where employees are invited to buy a share of the company at a set price (usually lower than market price). This benefit is most commonly offered to high-level employees, such as managers and executives. You might also decide to offer stock options to compensate for lower salaries if you are a startup with a limited budget.

Stock options can be a great low-cost benefit for encouraging employees to invest emotionally in your company and stay for the long run. This is because employees with stock options directly benefit from the success of the company. And this means that they are far more likely to commit and work harder to help you reach your goals as a business.

Employee health & wellness initiatives

Mental health awareness in the workplace has become a hot topic over the past few years, especially since the recent pandemic. As a result, many employers are now looking for ways to promote employee mental health. And one such way is including employee health and wellness initiatives in their employee benefits packages.

Promoting employee health and wellness is important for your reputation and employer brand. But it is also important for the bottom line of your business. This is because mental health issues can have a negative impact on the overall performance of your organization. It’s therefore important to do what you can to support the mental health of all your employees.

Here are some simple yet effective ways of promoting mental health awareness. You might consider including some or all of these in your small business employee benefits packages:

  • Gym memberships. Contact local gyms to enquire about team membership discounts. Or keep it simple (and cheaper) and arrange regular office or remote exercise classes for your employees.
  • Counselling programs. Offer therapy to any employees who might be suffering from stress, anxiety, or bereavement.
  • Free snacks or lunch vouchers. Free snacks and coffee can help your employees feel cared for and part of a team. Or you could even offer lunch vouchers for your canteen or nearby food establishments.
  • Transportation and parking benefits. Again, this can be a great benefit for helping your employees feel appreciated. You could also offer to pay mileage in the case of executives or sales reps, for example.
  • Flexible working schedules. This is an increasingly popular employee benefit these days as many employees are now seeking a healthier work-life balance. Offering remote or hybrid working models can be a great way to show your employees that you value this also.

Employee resource groups (DEIB)

Another hot topic these days is workplace diversity, equity, inclusion, and belonging (DEIB). As a result, many employers are now including DEIB initiatives in their employee benefits packages. The aim behind these initiatives is to create a working environment that benefits all employees, regardless of gender, ethnic background, socioeconomic background, and mental and physical ability.

One DEIB initiative that organizations are embracing in increasing numbers is the use of employee resource groups, also known as ERGs. ERGs are voluntary, employee-led groups that serve to foster diversity and inclusion. Participants all share a common characteristic, such as gender, race, ethnicity, veteran status, religious affiliation, or lifestyle. The groups offer a chance to network and socialize, work on professional development, and raise awareness of relevant issues.

Sabbatical leave 

Sabbatical leave has traditionally been something reserved for the academic world. However, lately, increasing numbers of non-academic employers are choosing to offer sabbatical leave as an employee benefit. This is mainly because, under the right circumstances, sabbatical leave can be a useful tool for preventing employee burnout and promoting health and wellness. And, as we just discussed, this is something that many companies now value and promote.

Essentially, sabbatical leave is an extended period of leave that companies can offer eligible employees. There are no laws relating to sabbatical leave. Whether or not you consider an employee to be eligible, and whether or not you pay them, will depend on your company policy. It also usually depends on the length of service and an employee’s reasons for requesting an extended leave of absence. For example, an employee might request a sabbatical to travel, learn new skills, volunteer, or spend time with family.

Small Business Employee Benefits Package 

The first step is selecting the perks and rewards you will include in your employee benefits packages. Once you’ve done that, you need to make sure you manage your small business employee benefits in the right way. Apart from making your processes run more efficiently, effective administration will also help you stay compliant with state and federal laws.

There are a number of things to consider here:

  • Use the right payroll software to ensure all taxes and deductions are calculated correctly for each employee’s payslip.
  • Make sure you check benefit laws at the federal, state, and local levels to ensure legal compliance. Check all laws regularly in case they are updated. Your state labor department is a good resource for this.
  • Review your employee benefits packages as your business grows. This is important because certain provisions of the FMLA are triggered when you hit specific milestones (such as reaching 50 employees).
  • Implement measures to protect the privacy of all employee benefits data. This includes online data security, secure data storage, and appropriate communication protocols to protect sensitive employee information.
  • Create a detailed small business employee benefits policy for your company outlining all your benefits. Make sure all new and existing employees have access to this document.
  • Take your time drafting your policy and make sure you offer appropriate and relevant benefits to each level of your organization.


Small Business Employee Benefits: Final Thoughts 

As we have already discussed, one of the most effective ways to attract top talent to your organization is by offering an attractive employee benefits package. The right package not only helps you stand out as an appealing employer, but it can also be a great bargaining tool during the contract negotiation process.

Offering the right employee benefits is also a valuable tool for retaining employees. By providing them with perks and rewards, you can motivate your workforce and keep them happy. And this is one of the best strategies for nurturing a motivated, loyal, and productive workforce.

Your small business employee benefits packages speak volumes about who you are as a business. They reflect your company culture and highlight what you value and how you reward your staff. That’s why it’s so important to take your time and design the best possible package for your business.

You obviously need to make sure you meet all legal requirements. But it’s equally important to identify which benefits would best serve your workforce. Think about the challenges that they face and what you could do to offer them more security. The more meaningful your small business employee benefits are, the more effective they will be at attracting and retaining the talent you need to build a solid and successful organization.

Employee Compensation & HR Benefits

So are employee benefits really necessary?

For employers and HR managers alike, company perks are a fantastic recruitment and retention tool, if used correctly.

Not only do employee benefit programs help attract top talent, but they also help to secure employees within the company and keep them loyal.

Furthermore, it shows workers that you, as their employer, share an investment in their overall health and their future.

What’s more, by actively encouraging your workers to get involved in perks, such as wellness programs, employees can improve their health and wellbeing. This could result in reduced healthcare costs for your organization.

Workers with fewer health risks mean fewer sick days, fewer trips to the doctor, and more time spent at work.

With employee compensation, everyone, from employer to HR manager to employee is a winner!

Automate your HR processes & spend more time focused on your employees!

Written by Charlotte Stace

Related posts


Leave a Comment