Employee Benefits and Compensation

Employee benefits and benefits in kind (also called fringe benefitsperquisites, or perks) include various types of non-wage compensation provided to employees in addition to their normal wages or salaries. In instances where an employee exchanges (cash) wages for some other form of benefit is generally referred to as a ‘salary packaging’ or ‘salary exchange’ arrangement. In most countries, most kinds of employee benefits are taxable to at least some degree.

Examples of these benefits include: housing (employer-provided or employer-paid), group insurance (health, dental, life etc.),  retirement benefits, daycare, tuition reimbursement, sick leave, vacation (paid and non-paid), social security, profit sharing, funding of education, and other specialized benefits.

 

The purpose of employee benefits is to increase the economic security of staff members, and in doing so, improve worker retention across the organization.

The term “perks” is often used colloquially to refer to those benefits of a more discretionary nature. Often, perks are given to employees who are doing notably well and/or have seniority. Common perks are take-home vehicles, hotel stays, free refreshments, leisure activities on work time, stationery, allowances for lunch, and—when multiple choices exist—first choice of such things as job assignments and vacation scheduling.

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