Benefits at Work That You Should Be Taking Advantage Of
Employee benefits can add significant value to your compensation package. But many people are missing out on lesser-known benefits at work.
March 29, 2022
Most of us consider salary as the most important aspect of our compensation package. But that doesn’t mean overlooking the value of employee benefits packages.
Many employers offer benefits to their employees. These can include health insurance, paid leave, and fringe benefits like gym memberships and discounted child care.
This article will discuss benefits at work with a focus on lesser-known benefits some workers are missing out on.
Standard employee benefits
Before we get started, let’s go over basic employer offerings.
Employer 401(k) matching
This benefit offers matching funds for retirement contributions. For example, if an employee contributes $1,000 to their 401(k), the employer may put in an extra $200.
To calculate the value of 401(k) matching, look at the maximum that your employer will put in. For example, an employer might provide matching up to a maximum of 5% of your salary. If you earn $40,000 per year, that means that this benefit is worth a maximum of $2,000. However, you must be able to contribute enough to your 401(k) to actually earn that full match. The value of the perk may be less if you are unable to save much for retirement.
Health care benefits are available to over 70% of private company employees. But the scope of these benefits varies significantly — some employers offer great coverage at low cost or no cost, while others offer mediocre insurance plans.
To calculate the value of health insurance, compare your employer’s plan to plans available to the public. Use your state’s health insurance marketplace to find plans, then compare monthly costs and benefits to the plans available from your employer.
Paid time off (PTO)
Many employers offer paid time off, also known as vacation time. The Bureau of Labor Statistics reports that private-sector employees receive an average of 10 days of PTO per year.
To calculate the value of paid time off, find your daily earnings rate. If you earn $40,000 per year and work an average of 250 days per year, you earn approximately $160 per day. In this case, 10 days of paid time off would be worth about $1,600.
Now, let’s get into some of the more unique employee benefits.
Lesser-known employee benefits
Employers offer different benefits. Employees should check with their human resources (HR) department to explore their entire benefits package.
It’s important to be aware of all the benefits that are available to you and how you can make use of them. If you don’t, you could be missing out on benefits like those listed below.
Some employers will pay education expenses for their employees. Often, this is for training and degrees related to the employee’s career.
For instance, a company may pay to have their manager earn a Masters in Business Administration (MBA). Or a tech company may pay for ongoing coding certifications and training for their workers.
Some companies allow employees to work from home, even if they don’t necessarily advertise this. Remote work in the US has expanded rapidly as a result of the COVID-19 pandemic, and many experts believe that the overall attitude toward remote work is becoming more relaxed.
Employers often purchase equipment for employees, and/or reimburse them for necessary equipment they have purchased themselves.
This applies to in-office equipment, like special technology that may help improve worker productivity. And for remote workers, some employers may cover the costs of setting up an ergonomic home office.
The “9 to 5,” 40-hour workweek is standard across most industries. But some employers may have some wiggle room.
For instance, some employers may allow workers to switch to four ten-hour days, instead of five eight-hour days.
Others may allow a partial work-from-home situation, where an employee works at the office most of the time but can work from home on occasion.
Some companies will contract with a lawyer or law firm to help their employees out with legal tasks and advice. Legal assistance plans vary in detail, but often they can provide low-cost access to professional legal advice and help with tasks like will creation, family law issues, bankruptcies, etc.
Employers know that workers with children must pay significant out-of-pocket costs for child care so they can work in the office.
Certain employers may offer child care benefits. This can come in one of two forms:
In-house child care facilities employees can use for free (or cheaply)
A stipend to help parents pay for child care expenses
Employee benefits insurance packages
Many employers offer health insurance to their workers, but there may also be other insurance options, such as:
Life insurance for employees and their families
Long-term disability insurance
Short-term disability insurance
Most insurance benefits require some out-of-pocket costs from the employee.
For instance, an employer may offer an insurance plan for $50/month. The same plan would normally cost $100/month — so the employer is essentially offering to cover half of the cost of that insurance plan.
Health and wellness benefits
Finally, some employers include perks or stipends to help support employees’ physical and mental health. This could include:
Stipends for a gym membership
Access to free or low-cost mental health counseling
Stipends for home gym equipment
Are employee benefits taxable?
Benefits are considered income and are taxable unless an exemption applies.
Fortunately, most employee benefits aren’t taxed because they are covered under an IRS exemption.
Common perks like health insurance, disability insurance, health savings accounts, educational assistance, meals, employee discounts, etc., aren’t considered taxable benefits.
However, “fringe benefits” are generally considered taxable income.
Fringe benefits might include free or reimbursed travel, vacations, memberships, tickets to events and other cash-equivalent benefits. These fringe benefits are considered income and must be added to an employee’s W2 tax form.
The rules for this are complex — see the full IRS benefit taxation rules for details.
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