What's the difference between employee benefits and perks?

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There’s a lot a company can do to attract and retain top talent, from good compensation to a career plan, to offering benefits and different perks. But what’s the difference between employee benefits and perks and how a company should take advantage of them?

What are employee benefits

According to the U.S. Department of Labor’s Bureau of Labor Statistics, employee benefits are non-wage compensation that a company provides to its employees. These are items that if not offered by the company, the employee would have to pay for, such as health insurance. Some are even obligatory, such as workers’ compensation. 

They can be divided into the following categories:

  1. Legally required benefits
  2. Insurance
  3. Retirement
  4. Paid Leave
  5. Supplementary Pay

Benefits encompass healthcare, including vision and dental, paid time off, such as paid leave and vacation time, maternity and paternity leave, life insurance, and 401k. These are more reliable than perks

 

What are employee perks

Employee perks are a good testament to the company’s culture. They became famous with the rise of the tech giants, which transformed their HQs into campuses with many attractions, facilities and perks, and are now a must-have for many employees. 

As benefits, perks are non-wage compensation a company offers its employees. They can be many things, and here are some examples:

  1. Company Car (also for personal use)
  2. Gym memberships
  3. Summer Fridays
  4. Employee Recognition Programs
  5. In-office massages 

 

What's the difference between employee benefits and perks? 

The main difference between employee benefits and perks is in their essence: employee benefits are essential for a healthy, happy life, and expenses that the employee would eventually have to cover themselves if their company didn’t offer them, while perks are “nice to have”. 

That is why benefits have a tremendous impact during recruitment, and perks are usually the cherry on top. A top-talent employee will look at their 401k options, medical assistance and paid leave before they look if they’ll have a free gym membership from their employer. 

That is directly linked to cost, too: health insurance in the US can cost up to a couple of thousand dollars a month, while a gym membership goes for a couple of bucks. 

Choosing the right benefits for employers is part of good RH, management and talent acquisition/retention, and it should be a top priority for all companies. If you are looking for a benefit that increases employee productivity and provides your company with a tax break, talk to us today.