Employee benefits

From ArticleWorld

Employee benefits are granted to employees in addition to the employee’s normal wage or salary.


Other terms

  • Employee benefits are also described as fringe benefits, perks or prerequisites.
  • The phrase “salary sacrifice arrangement” is used when an employee exchanges wages for another form of benefit.
  • Executive benefits, also known as a golden handcuff or golden parachute plan, are benefits given to top-level executives.
  • Cafeteria plans are used to describe a menu of benefits for employees to choose from.


Employee benefits are distributed to workers in addition to their regular wage or salary. They ultimately increase the economic security of a company’s employees.

Benefits vary by company and employment level (most companies, for instance, require an employee to be full time before qualifying to receive benefits). Typical benefits include group plans for health, dental and life insurance, income protection, retirement or pension plans, daycare, sick and vacation leave, social security and tuition reimbursement.

Perks are usually used to describe benefits that are more discretionary. Employees who are doing well or have been with the company a long time often receive perks; they are not generally available to every employee. Perks can include company cars, leisure activities, stationary, preference in scheduling of time off, lunch allowances, hotel stays, first preference for job promotions and free refreshments.

United States

Benefits offered in the United States include assistance in relocation, group plans, retirement plans, life insurance and long-term care options, legal assistance, childcare assistance and applicable employee discounts.

Benefits are often deducted from an employee’s salary prior to taxes being calculated, which further increases the benefit to employees.


Fringe Benefits Tax applies to benefits paid to an employee. Laptops, cellular phones, retirement savings with contribution and a briefcase are all excluded from this. Special rules may apply to vehicles.