What are the four major types of employee benefits?

5 of March, 2021

Employee benefits can exist in different forms. Employers usually look at these perks positively as they can involve tax deductions. Adding employee benefits to your employees working contracts can really help improve their morale too. Alongside in lieu days, find out the types of employee benefits you can offer to your employees.

Benefits also help with employee retention. It does this by offering schemes that reward employee loyalty. To find out what types of employee benefits you can offer, read our blog article below and discover more about how to keep your employees motivated.

Retirement pension as a type of employee benefit

Retirement is the most commonly associated type of benefit an employee can request to have within their contract. You will find that some countries a retirement contribution is already fixed. In others the employee can choose to buy in to the company’s pension fund scheme. In the USA you can use the 401k pension system that is less costly to employers and employees alike.

Of the types of employee benefit, this is the one your company will find most in demand.

Social security and medical insurance

Social security and medical insurance contributions are mandatory in most EU countries. In the United States and other countries however employees can decide to buy in to a health insurance that the company offers as part of their employment package. The advantage of this is that deals between insurers and medical services can reduce costs.

Life insurance as an employee benefit

Life insurance covers the payout your employee’s family receives if said employee dies suddenly before retirement. The employee chooses to take up life insurance as a way of looking after their family should they suddenly pass away.

Often life insurance will vary according to whether the employer was in some way responsible for the death. If the employee had an accident due to a direct result of their work, you may be required to pay more out in life insurance.

Disability insurance

By offering your employees disability insurance, they can insure themselves against leaves of absence. In some countries a disability insurance is mandatory.  In others you have to choose between short-term and long-term disability benefit. Often the pay packet associated with disability insurance varies according to whether it is a long term accident or a short term one, with the government stepping in to compensate for longer term accidents unrelated to the workplace.

What other types of employee benefits exist?

You can also offer your employees other perks. Some of these can include :

• A company car or travelling costs, also known as commuter benefits.
• Corporate travel management benefits: Your employees can book, manage, report, and support all your travel easily .
• Relocation costs, often used with expats.
• In lieu days or in lieu time off for when the employee is working overtime. Use a time tracking app to calculate any overtime
• Stock options of the business. Some companies make it a rule in their employee contracts to offer stock options so that the employee feels they have a stake in the company’s success. They thus see a direct relationship between their performance and the company’s long term prospects.