Examples of fringe benefits by category

Most employees expect benefits. A good regular salary may have been enough years ago, back when government subsidies managed things like healthcare and retirement, but those programs have become less and less effective. People want more.

Fringe benefits are how employers make up the gap. By offering perks such as gym memberships and plenty of vacation time, companies can sweeten the deal for prospective new hires and attract top talent. Other options like work-from-home stipends and cell phone plans keep existing employees happy, reducing turnover and boosting productivity.

Different benefits appeal to different teams, but what matters most is providing more than just the bare minimum—health insurance, workers’ compensation, and a competitive salary. Employees today expect more, and attracting the best will depend on offering the right perks.

In this blog, we’ll talk about different types of fringe benefits and how employers can make the most of what’s available.

Finding employee fringe benefits

The field of workplace perks has become an industry of its own. Not only have countless services emerged to simplify things like wellness and retirement, but employee benefits administration software (BA) now exists to help companies simplify the process of delivering a benefits program.

A few well-known BA providers are:

• BambooHR

• Zenefits

• Justworks

• Gusto

• Rippling

These companies aggregate different service providers and sell bespoke packages to employers looking to give team members more. No matter your budget, there’s a way to set your company apart as a great place to work. Plus, many of them deal with the IRS on your behalf to handle taxable fringe benefits.

Different types of fringe benefits

Companies are popping up all the time to offer fringe benefits for workers. It wasn’t long ago that mobile meditation apps became mainstays in corporate wellness plans, and now virtual fitness platforms like Peloton change how companies sponsor physical well-being.

So yeah, building a comprehensive list of fringe benefits seems impossible given how often things change. However, there are a few categories into which they usually fall.

Fringe benefits generally cover needs such as:

• Health and wellness

• Retirement planning

• Time off and vacation

• Financial offerings

• Work-life balance

• Company-sponsored fixtures and events

• Professional development

Let’s take a look at what’s included in each category.

Health & wellness

Insurance plans are expensive, especially in the U.S. However you may feel about the government’s responsibility to cover healthcare needs, it’s a fact that healthcare-related bankruptcies are on the rise.

Employees need the ability to visit a doctor from time to time, whether for a checkup, a teeth cleaning, or to be fitted for glasses. Unfortunately, having insurance coverage tied to employment puts employers in a difficult position. They have to keep costs low while making sure employees have access to the full value of the benefit.

While many states have mandates in place to ensure full-time employees receive health benefits, companies still have to pick the right plan and supplement it with other wellness programs.

Healthcare plans usually fall into the following three categories:

• Health Maintenance Organization (HMO): Employees select a primary care physician (PCP) from a network of healthcare providers, then use a referral system to see a specialist. HMO plans often have lower premiums and out-of-pocket costs compared to other plans.

• Preferred Provider Organization (PPO): Employees can visit any doctor or specialist without a referral, both in and out of the plan’s network. PPO plans usually have higher premiums and out-of-pocket costs compared to HMO plans.

• High-Deductible Health Plans (HDHPs) with Health Savings Accounts (HSAs): HDHPs have lower premiums but higher deductibles compared to traditional health plans. Deductibles can be paid with tax-advantaged/tax-free spending accounts funded by employees and employers.

Matching or exceeding funds for an employee’s HSA is also a fringe benefit.

Companies may also offer wellness initiatives in addition to a healthcare plan, including things like:

• Gym memberships

• Complementary health screenings

• Nutritional counseling

• Stress management programs

• Stop Smoking programs

Health and wellness benefits won’t always match the needs of your company’s workforce. Younger people don’t smoke tobacco the way older generations do, so a Stop Smoking program won’t be of much value to that demographic.

It’s also worth noting that some fringe benefits are tax-deductible for employers depending on how much value they add to an employee’s compensation package. Let IRS Publication 15-B be your tax guide to fringe benefits.

Retirement planning

For young workers, the future is a rocky place right now. Those born after 1982 have lived through multiple recessions and have seen their Social Security safety net plundered to cover government mismanagement and overspending. It’s a touchy subject.

Employers have an unprecedented opportunity to attract top-level talent by providing them with hope for their future.

401(k) plans, pensions, and employer contributions to retirement accounts are increasingly important to young workers. People aren’t just looking for jobs; they’re looking for a future. Companies who understand that and show that they actually care about a tomorrow will have little trouble finding great employees.

Boosting your current employees’ financial literacy is also a good idea. The field of retirement is complex, filled with unfamiliar terms and interest rate calculations. Helping employees plan for retirement is a life skill that will help them well into the future.

Time off & vacation

If making money didn’t require work, most of us would spend more time not working. Time off is the closest thing we have to free money.

Employers can set themselves apart by offering more PTO and more opportunities for PTO. Maybe in addition to a couple weeks of paid vacation, your company offers no-questions-asked sick leave for employees who feel under the weather.

Other types of PTO can include:

• Personal days: Like mental health days, personal days a lot time off to recharge, handle personal matters, or have time for self-care

• Parental leave: Parents and newborns need time to be together, whether following birth, adoption, or fostering

• Bereavement: People who suffer the loss of a loved one benefit from having time to grieve and attend to matters related to the person’s passing

• Volunteer time off (VTO): Some companies offer paid time off specifically for volunteering activities, giving employees a chance to give back to their communities and support causes they’re passionate about

Flexible work hours is another approach to scheduling, made popular as the rise of work from home brought awareness to people’s different scheduling needs. Flexible work scheduling lets employees adjust their schedules to accommodate personal needs—like attending appointments or dealing with unexpected situations—without taking time off.

Companies need to organize operations well enough for employees to take time off when they need it. More PTO, therefore, indicates that a company has its house in order and won’t put undue strain on its individual workers.

Financial offerings

Cash is king. The only thing better than a paycheck is a bigger paycheck, which is why financial benefits are a key differentiator among employers.

It’s hard to imagine a more effective incentive than money. Companies dabble in gift cards and company swag to be different, but all that imagination could’ve been avoided by just offering more money.

Financial benefits can include:

• Cash bonuses: Your boss hands you some cash and says, “Hey, we value you.” It doesn’t get any simpler.

• Profit sharing: When the company wins, everybody wins. Companies can’t celebrate record-breaking profit years without help from their employees, and profit sharing ensures they get a piece of the pie.

• Stock options: Tenured employees who are in for the long haul get to buy a piece of the company at a special price. If the company does well in the future, those stocks are worth more.

• Employee stock purchase plans (ESPPs): In a similar vein to stock options, ESPPs let employees buy company stock at a discount, helping them save for the long term while owning a tiny piece of the place they work.

• Tuition reimbursement: Along with paying you for the work you do, your job also helps pay for school so you can keep learning and growing. It’s a win-win.

Financial benefits help employees get ahead in their own lives. It creates independence while relieving stress related to money woes. In almost all cases, bonuses lead to more productivity.

Work-life balance

Employees need the ability to leave work at work sometimes. When jobs become all-consuming or don’t leave time to attend to other important life duties, people get burnt out, over stressed, and frustrated. Work-life balance benefits help make a person’s job more manageable and enjoyable.

These benefits can include:

• Flexible work schedules: Employees can adjust their work hours to accommodate personal commitments without the stress of a rigid timeline

• Telecommuting: Working from somewhere other than on business premises provides the freedom to escape the office environment and relieve those commuter woes

• Childcare assistance: Support through daycare subsidies, on-site childcare facilities, and adoption assistance eases the burden of being a parent while working

• Eldercare assistance: People who care for their aging family members need help balancing their caregiving duties with their professional obligations

We all have demands on our time that extend beyond work. Make it easy for employees to handle those matters, and set your company apart as one that cares about employee well-being.

Company perks & events

Perks go beyond a job offer to make the work experience more enjoyable and rewarding. These non-monetary benefits add value to an employee’s life and foster a sense of belonging within the company.

Some popular perks include:

• Company cars: The convenience of a company-provided vehicle for personal use helps to eliminate worries about transportation expenses

• Gym memberships: Complimentary or subsidized gym memberships promote physical well-being and work-life balance

• Company-sponsored events: Company events help colleagues to bond and build camaraderie over things like team-building activities, holiday parties, and volunteer opportunities

• Employee discounts: Exclusive discounts on products or services offered by the company or its partners help employees save money

Employees like being made to feel important. Perks help to do that and ultimately contribute to a positive work environment with stronger retention rates.

Professional development

Unlike their parents, young people entering today’s workforce don’t expect to stay with one employer for the rest of their lives. They want their jobs to expand their skills help them stay ahead. Professional development goes beyond the job by helping employees unlock their potential and prepare for the future.

These benefits can include:

• Continuing education: Courses, seminars, or workshops related to your field or desired career path

• Training programs: Many companies offer in-house training programs to help employees develop specific skills or prepare for advancement within the company, and can include leadership training, technical skills workshops, or communication seminars

• Conferences and workshops: Attending industry conferences or workshops can provide valuable networking opportunities and exposure to the latest trends and developments in your field

• Certifications: Some employers offer financial support or reimbursement for certification exams and study materials to help employees achieve relevant certifications

• Mentorships: Pairing employees with experienced mentors can accelerate professional growth and skill development

Investing in professional development benefits not only helps employees enhance their skills and knowledge, but it also fosters a more skilled and motivated workforce.

Asking employees what they want

A company’s desire for fringe benefits can easily exceed its budget, so it’s important to select the right options for your specific workforce. How do you do that? Simple, just ask.

Surveys or feedback boxes let employees inform companies on which direction to take. Rather than make decisions that may or may not work for everyone, HR teams can go straight to the source and get hints about the benefits package employees actually want.

Just like fringe benefits, giving employees a voice in the compensation they receive builds trust and loyalty, both of which are great for company culture.