Understanding Employee Benefits
Although employee benefits are becoming more popular, many employees and employers alike remain unaware of the potential benefits available.
What are employee benefits?
Employee benefits are various kinds of non-wage compensation in addition to an individual’s normal salary or wages, given by their employer. Employee benefits are designed to promote employee satisfaction and wellbeing. Some benefits may be required by law (dependent on risk associated with the job and the laws).
Why are employee benefits so important for a business?
From an employee’s point of view, a good benefits package increases the value of their working life, contributing to their health and that of their family. From the point of the employer, a good benefits package will ensure that staff remain happy and committed, increasing their performance and ensuring they won’t go to work somewhere else.
What are some examples of employee benefits offered by an employer?
Sick Pay
Most employers are entitled to statutory sick pay after a week of full pay, however some employers sometimes offer more than the base rate for sick pay.
Dental and Optical Insurance
Dental insurance reimburses the cost of everyday examinations, hygienist appointment, fillings and also injuries and accidents, up to a limit. Not only does it include NHS appointments but also private treatments up to a set limit.
Optical insurance can help employees pay for eye tests as well as glasses and contact lenses, also paying out a lump sum in the event of accidental or permanent sight loss. Cover for both of these can normally be extended to include family members.
Critical Illness
Critical illness means that if an employee is diagnosed with a number of specific medical conditions they will receive a tax-free lump sum. The policy will list which specific conditions are eligible; typically including cancer, heart attacks, stroke, MS, among others and can be extended in some cases to include partners or family.
Private Medical Insurance
This will pay towards the cost of private treatment for certain medical problems.
Health Cash Plan
A Cash Plan covers the cost towards minor healthcare; such as physiotherapy, specialist appointments and some other medical expenses. This can also include optical and dental bills.
Life Insurance
Life insurance will pay a lump-free tax sum of money, providing support to family members who depend on them financially.
Pension
Most pensions these days are a ‘defined contribution’. With this kind of pension; the employee and the employer put a set amount into the pension account from their wages. The pension that is available when the employee retires will depend on how much they have put into it and how the funds perform. Auto-enrolment now means that employers who don’t offer a pension scheme, that they now need to offer one.
Workplace ISA
An ISA offers an extra opportunity for employees to save or invest money through their workplace; typically it is an ISA that allows employees to contribute to a stocks and shares ISA investment directly from their salary. Therefore, investments can go down and up as they do traditionally.
Car allowance
Some employers give a mileage allowance, whereas others may offer extra payments to allow them to buy a car for their work. The other offering could be the more traditional company car when they provide a car for the employee.
Gym Membership
Some employers will provide a free membership for the gym or others will have an affiliation with a local gym or chain that will provide the employee with a discount.
The variation a company offers regarding employee benefits is always worth checking as many value the benefits offered now rather than the overall salary.