Explaining Employee Benefits in Layman’s Terms

There are many employee benefits that an organization may take advantage of for several reasons. Any of your workers may be unfamiliar with the many nuances and subtle variations within the retirement programs you have. Employee benefits may be unfamiliar territory for employees from other industries or even countries. Every employee should be aware of and take advantage of any employee benefits you have, but some employees do not know what to ask for.

Here are a few simple ways to describe employee benefits to current and prospective employees:

The Gist

Employee benefits, according to Wikipedia, are different forms of non-wage compensation given to workers in addition to their regular wages or salaries (source). To put it another way, employee benefits are any benefits given to an employee in addition to their salary or wage.

There are three forms of employee benefits.

  • Benefits at work
  • Benefits for health
  • Benefits for financial security

Benefits at Work

Skills growth, working hours and paid leave, food, and drinks, and employee events, clubs, and gifts are all examples of workplace benefits.

Skill Development

Companies need their workers to learn new skills to keep up with the pace of technological advances we’re seeing around us. Both the corporation and the employee would profit from sponsoring an employee to learn a new skill.

Working Hours and Paid Leave

Flextime is becoming increasingly popular, as it allows employees to have more control over their scheduled hours. With the recent pandemic, remote working will be given as a service to employees. Paid leave is one of the most common job benefits, and it can include extra vacation time and, most notably, paid parental leave.

Food and Beverage

This includes any company-provided free food or drink, such as free coffee in the cafeteria or restaurant coupons or vouchers.

Employee Activities, Clubs, and Gifts

This category includes items like employee running clubs, birthday parties, and anniversary presents, among other things.

Benefits for Health

This one is self-explanatory, and it can be divided into two categories: healthcare and wellbeing.


Physiotherapy, chiropractic sessions, and psychological assistance are some of the most popular healthcare benefits offered by various organizations.


We’re seeing a rise in the importance of fitness in the workplace as the wellness industry expands. Gym memberships are a common example, but some larger businesses, such as Google, may have in-house gyms, massages, and other services.

Benefits for Financial Security 

Retirement programs, pensions, and direct financial compensation are among the most widely debated and contrasted benefits for workers.

Retirement Plans

These may take several different forms depending on the organization and the employee’s position, but the most common are:

  • 401(k) / Solo 401(k)
  • 403(b)
  • 457(b)
  • IRA / Roth IRA / SIMPLE IRA / SEP IRA / Self-directed IRA
  • HSA

Employees should be given the ability to decide which retirement package better fits their needs.


Many different insurance policies may be provided to mitigate a range of possible conditions, ranging from disability income insurance to life insurance. The following are the most common:

• Life insurance 

• Disability insurance 

• Health insurance

• Vision insurance 

• Dental insurance

The employee, like the retirement plan, should be helped in deciding and evaluating the best insurance policies for them.

Direct Financial Benefits

These are common in the form of commissions and incentives, but they may also be in the form of deferred compensation plans. 

These perks, also known as “golden handcuffs,” are often used to keep workers happy with their jobs.

Other Benefits

Lifestyle benefits, such as improving work-life balance by providing in-house childcare and legal assistance, are becoming increasingly popular. Remote working has also grown in popularity as a result of social distancing constraints in various states, as previously stated.

Mutual Benefit

As an employer, seeing all of these employee benefits may make it look that the benefits are one-sided. But there are ways to keep costs down while also delivering rewards by partnering with HR and the accounting team. 

Employee benefits are built to make their lives easier so they can focus on doing their best job for you. You can brighten someone’s day by providing wellness and lifestyle benefits, and you can save someone’s life by providing insurance.

While these benefits are important to your workers, they should be provided and handled equally. Consider hiring an employee compensation company to help you navigate the complexities and save money.