What Are Employee Benefits: Types, Importance, And Examples

Confused about employee benefits and thinking what are employee benefits? Yes, you are; that’s why make sure you read and understand this scrutinized dissertation on employee benefits.

Here we bring everything you need to know about employee benefits, including what are employee benefits, types of employee benefits, importance of employee benefits, examples of employee benefits, and most commonly offered employee benefits.

So, whether you are an employee or employer, you should not miss this in-depth guide.

What Are Employee Benefits?

Employee benefits are non-wage compensation that is given to employees by the company. Disability insurance, retirement plan, medical insurance, fringe benefits are the most commonly offered employee benefits so that employees can feel rewarded and motivated for their work.

For every company and organization offering their employees parks or employee benefits is necessary and important. Employee benefits help employees to have a good work-life balance.

employee benefits
What are employee benefits?

Types of Employee Benefits

Types of Employee benefits depend on the types of organization and the job position. Types of employee benefits can also be different country-based. Not every country’s employers offer their employees the same employee benefits or perks.

Let’s see the types of employee benefits:

  1. Disability Insurance
  2. Life Insurance
  3. Medical Insurance
  4. Paid Time Off (PTO)
  5. Retirement Plans
  6. Fringe Benefits
  7. Family and Medical Leave (FMLA)
  8. Wellness Programs
  9. Tuition Reimbursement
  10. Employee Discount
  11. Flexible Working Hours
  12. Unlimited Paid Time Off (PTO)
  13. Domestic Partner Benefits

1. Disability Insurance

Disability insurance is wage protection for employees. When employees have got unexpected injuries or illnesses, disability insurance benefits cover their wages for that time.

This employee benefit, every organization must offer to their employees because this employee benefit is required by law.

Disability insurance has two types:

  1. Short-term Disability Insurance
  2. Long-term Disability Insurance

1. Short-term Disability Insurance

Employees get Short-term disability insurance when they are injured for some week or a month. Short-term disability insurance does not cover long periods of disability.

2. Long-term Disability Insurance

Long-term disability insurance employee benefits are only eligible for long-term or permanent injuries or disability. When an employee does not perform his work for permanent injuries, the company lists him on long-term disability insurance.

2. Life Insurance

life insurance

Many big organizations and companies offer life insurance employee benefits. Life insurance will protect your family after you die. Life insurance benefits will only be eligible if an employee dies or dismembers.

Employees’ children, spouses, and parents are the beneficiary of life insurance benefits. Life insurance is also available to buy. You can buy life insurance from an insurance company, but life insurance costs are high.

3. Medical Insurance

Medical insurance is the most common benefit given to employees by organizations. Medical insurance covers employees’ hospitalization costs, including hospital rooms, drugs, medical devices, and more.

Medical insurance mainly covers three insurances: vision, dental, and health insurance. These medical insurance categories are popular all over the world.

In four major employee benefits lists, medical insurance is one of them. Most organizations cut some money from employee wages to cover their medical insurance.

4. Paid Time Off (PTO)

Paid time off employee benefits is also known as PTO. Paid time off benefits covers employees’ sick leave, vacations, holidays, and personal circumstances.

Paid time off (PTO) benefits give employees full compensation when they are on vacation, and that’s why this employee benefit is very popular. Most companies have PTO benefits for their employees.

5. Retirement Plans

retirement plans

Retirement plans and pension benefits are given to retired employees with a constant income and secured life. 401(k) are most commonly offered as retirement plans to employees.

Fixed company contributions, pension plans, and employee stock ownership plans are the most common retirement benefits. And U.S. federal employees’ retirement benefits are divided into four categories: Deferred, Early, Immediate, and Disability.

6. Fringe Benefits

To make employees more happy and sincere, employers give fringe benefits. Fringe benefits are extra non-cash payments that help companies to get more talented and better employees.

Examples of fringe benefits are company-paid life, vacation pay, flexible medical or child-care spending accounts, non-production bonuses, and unemployment insurance programs. Fringe benefits are getting more popular in the United States and Europe.

Fringe benefits also motivate employees to do work consistently and precisely. Non-production bonuses are the most common types of fringe benefits that are offered to employees.

7. Family and Medical Leave (FMLA)

family and medical leave (FMLA)

Family and Medical Leave or shortly FMLA benefits that cover employees 12 workweeks of unpaid leave during any 12-month period of time, new child care, family-related emergency, a sick family member.

To be eligible for Family and Medical Leave (FMLA), you must be a full-time employee; at least fifty employees are working with you in your company. Worked at least 1,250 hours over the past 12 months.

8. Wellness Programs

When companies want success, employee work is the fundamental aspect that companies need to consider first. That’s why organizations offer their employees wellness programs that help improve employee well-being.

Well programs benefit also known as Corporate wellness programs. Wellness programs typically include: mental health assistance, employees eating better, physical health, discounted gym membership or company gym rooms, smoking cessation programs, resilience education programs, and more.

9. Tuition Reimbursement

tuition reimbursement

Companies offering their employees another best employee benefit is tuition reimbursement that is non-mandatory benefits by law. Tuition reimbursement is when an employer pays the cost of an employees’ education.

The tuition reimbursement money is used only for education-related costs such as education fees, school supplies, tuition, and more. Tuition reimbursement money is text-free.

The student debt crisis in the United States is a huge crisis, and now student loan debt is over $1.86 trillion. So, it’s transparent how important tuition reimbursement benefits are for employees.

10. Employee Discount

An employee discount program is an employer giving a certain percentage of discount on their own products and services for their employees. Employee discount programs gradually increase, almost every giant organization in America offers an employee discount.

Standard employee discounts range from 10% to 30% discount on the company’s goods and services. Employee discount is one of the low-cost ways to reward employees for achieving company goals.

11. Flexible Working Hours

Flexible working hours benefits allow employees to work at the hours that suit them. Flexible working hours employee benefits contrast traditional work hours (9 to 5).

Flextime working hours benefits help employees to manage their time effectively and bring job satisfaction. flexible working hours programs also include work from home.

12. Unlimited Paid Time Off (PTO)

Unlimited Paid Time Off or Unlimited PTO is mainly a vacation policy that does not give a predetermined day off to employees. Employees can take the time and days off that they want after completing their work.

Many organizations use unlimited PTO benefits as a great recruitment and retention tool that helps employers find new talent.

Netflix, Grubhub, Roku, LinkedIn, and more companies are already offering their employees unlimited paid time off benefits.

13. Domestic Partner Benefits

Domestic partner benefits were created in the 1980s. Domestic partner benefits are an employee benefits plan that ensures non-married couples the same benefits as those provided to married couples.

Employees must be eighteen years old, have an exclusive relationship with their partner, and be financially independent with their partner. More than 77% of organizations still offer their employees domestic partner benefits.

Why Are Employee Benefits Important?

Employee benefits help employees’ family, health, finance and balance employees’ work/life. Employee benefits are the best way to keep employees motivated and enthusiastic about their work.

So, let’s see why are employee benefits important:

  • Better Health:
    As an employer, you must consider your employee’s health first. If employees are not coming to work, companies lose their productions, leading to profit loss.
  • Higher Productivity:
    Unproductive employees do the bare minimum work for the company. That’s why to make them productive again; employers need to give them extra benefits.
  • Organization’s Reputation:
    Companies are run by employees and reputation for their products. So, when employees are not producing the best products, the company’s reputation will be gone. Employee benefits stay employees motivated and rewarded for their work, and they manufacture the best version of the products.
  • Increased Employee Attendance:
    For increasing employee attendance, the employee benefits can keep a high role. When employees feel financially and physically secure, they are willing to come to work more frequently.

5 Most Commonly Offered Employee Benefits

Health insurance, retirement plans, paid time off (PTO), disability insurance, and life insurance commonly offer employee benefits. Employers offer different types of employee benefits for part-time and full-time employees.

Here are the 5 most commonly offered employee benefits:

  1. Health Insurance:
    Health insurance is the most commonly offered employee benefit. Not only in the United States, but health insurance benefits are also popular worldwide. Employee health insurance benefits cover doctor, drugs, and medical devices cost for employees.
  1. Retirement Plans:
    The company gives employees retirement plans that refer to financial strategies of saving and investment. A 401(k) is the most common retirement plan organizations, or employers provide.
  1. Paid time off (PTO):
    Employees can take off a specific number of days and still receive compensation, paid time off (PTO). Paid time off covers vacations, sick days, and more.
  1. Disability Insurance:
    Disability insurance protects employees from financial losses. There are short-term disability and long-term disability and both for employees.
  1. Life Insurance:
    Companies pay employees income if someone passes away. Life insurance is also commonly offered employee benefits, but life insurance is quite expensive.


Whether you are an employee or employer, it’s necessary to know what employee benefits are and the types of employee benefits.

We saw some remarkable changes in the corporate world, and still, we also noticed more big changes.

Recently many new employee benefits offer organizations like unlimited paid time off, pet insurance, no dress code, and free food.

Employees are always want better work/life balance and workspace, and companies meet their necessities by employee benefits.

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