What are employee benefits?
One of the most important ingredients for success is the right team. With attrition rates on the rise, changing external circumstances, and increase in competition, employee benefits are key to retain the best talent.
What do you mean by employee benefits?
Employee benefits are incentives offered to employees by companies, in addition to a worker’s base salary or wages. Companies, generally, incur the entire or a part of the costs to provide for these benefits.
What are the different types of benefits?
Benefits may be divided into two kinds: core benefits and optional benefits.
Core benefits are provided to all employees of the company, and are agnostic to the designation of the employee or duration of employment.
On the other hand, optional benefits are ‘optional’. All employees are not entitled to them. They are also known as company perks.
1. Core benefits
Core Benefits are employee benefits that employers have to provide due to legislation or contractual obligation. In the UK, employees are entitled to the following core benefits:
a. Workplace Pension
b. Income protection
c. Holiday allowance (a minimum of 5.6 weeks per year)
2. Optional benefits
Optional benefits are benefits that an employer is not obliged to provide but does so for increased employee- satisfaction and to improve the company culture. These benefits are often highly-valued by employees as they provide a tangible cost-saving. The examples of optional benefits are:
a. Private medical insurance (PMI)
b. Wellbeing benefits such as free food or drinks, company cars, childcare
c. Healthcare such as eye care vouchers, Gym membership and Dental insurance
Employee benefits have an implication on the payroll and the tax calculations of the in-hand salaries received by employees. Hence, it’s essential for calculating and tracking all the benefits for each of the employees. Moonworkers simplifies the process of calculating the payroll incorporating the employee benefits. On Moonworkers, you can simply add new benefits, track the existing ones year-wise and also see the summary of all the benefits. They are also taken into account automatically when calculating the payroll of employees.