Optional Employee Benefits

There are many benefits that you can provide, even though you're not required to do so. The goal is to make your overall compensation and benefits package competitive with other employers at the lowest possible cost. As a practical matter, most businesses have to provide employees with time off and leave, and many employers choose to offer health and life insurance and retirement benefits. Benefits you might consider offering include:

Time off and leave. Note that many employers have adopted paid time off policies that don't require employees to specify why they are taking time off. The traditional method is to specify reasons why employees may take time off, and to limit the amount time off based on the reason for the absence. Common time off policies include:
- Paid or unpaid holidays. Many businesses traditionally give employees time off for holidays, such as Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas.
- Vacations. Providing paid vacation time is one of the most widespread benefits. Issues include how much to provide and the conditions placed on taking it.
- Sick leave. Like paid vacations, many employers provide employees with a certain amount of paid sick leave each year.
- Personal time. Employers may explicitly provide a limited number of days that can be taken off with pay when situations arise in which an employee can't reasonably make it to work even though he or she isn't ill or on vacation.
- Funeral leave. Funeral and bereavement leave is somewhat less common, but still offered by many employees.
Health care. One of the most important and popular benefits that you can provide is a health care plan.
Disability pay. Some employers offer benefits that guarantee income when an employee can't work because of sickness or accident. Disability benefits can include paid sick leave, short-term disability insurance, and long-term disability insurance.
Life insurance. Group-term life insurance is the most commonly offered form of this type of benefit. Other types of life insurance are also available, such as accidental death and dismemberment and business travel accident insurance. There are also life insurance policies that have substantial investment elements.
Retirement plans. There are many options for retirement savings arrangements including 401(k) plans, profit sharing plans, simplified employee pensions (SEPs), and savings incentive match plans (SIMPLE plans).
Fringe benefits. Some fringe benefits can be provided to employees without being taxable as income, include no-additional cost services, qualified employee discounts, working condition benefits, and qualified transportation benefits.