Types and Advantages of Employee Benefits
What are employee benefits, which types are there and why do employers offer them? A short guide for employers.
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iWallet | Blog Yazarı
April 16, 2020
5 min read
Employee benefits are extra perks offered to employees on top of their salary. Some, such as social security and health insurance, are required by law, while others are provided voluntarily by the employer.
Examples of optional benefits include free breakfast and lunch, gym membership, stock options, transport support, retirement planning services, childcare and education assistance.
More and more employers today understand the importance of a support system aimed at employee satisfaction. Through it, employers can offer benefits on top of salaries that improve employees' living and working conditions. The reduced tax rates on some benefits make this even more attractive.
One advantage of benefits is that, under certain conditions, they are tax-exempt for the employer. Employees who receive them, on the other hand, may need to include their fair value in their annual taxable income. Even when a third party actually provides them, benefits are generally considered to be provided by the employer, because the employer pays for them. Likewise, the employee is usually the recipient, even if family members can use the benefit too.
Types of employee benefits:
Examples of optional benefits include free breakfast and lunch, gym membership, stock options, transport support, retirement planning services, childcare and education assistance.
More and more employers today understand the importance of a support system aimed at employee satisfaction. Through it, employers can offer benefits on top of salaries that improve employees' living and working conditions. The reduced tax rates on some benefits make this even more attractive.
One advantage of benefits is that, under certain conditions, they are tax-exempt for the employer. Employees who receive them, on the other hand, may need to include their fair value in their annual taxable income. Even when a third party actually provides them, benefits are generally considered to be provided by the employer, because the employer pays for them. Likewise, the employee is usually the recipient, even if family members can use the benefit too.
Types of employee benefits:
- Health insurance
- Unemployment insurance
- Sick leave
- Workers' compensation
- Stock options
- Disability insurance
- Paid vacation
- Retirement planning services
- Life insurance
- Paid leave
- Achievement awards
- Sports and fitness support
- Employee discounts
- Meal support
Why do employers offer benefits? Some of the reasons employers invest in benefit programmes include:
Reputation: Companies that offer perks beyond salary stand out from competitors and become attractive to different stakeholders. Companies known for valuing their employees look trustworthy to customers and attract talented people.
Employee health: Companies lose out when employees cannot work because of illness or injury. A safe workplace and benefits such as gym membership, health insurance and dental cover can improve employees' health and reduce sick leave.
Employee engagement: Employees work harder when they feel their contribution is appreciated. Perks such as paid vacation, health insurance, a company car and stock options are one way to increase employee satisfaction.
If you would like flexible benefits support for your company, you can reach us through our contact page.