15 of the Most Common Employee Benefits to Offer in 2025

Think of compensation like investing. A smart investor doesn’t rely on one type of asset for financial security; they diversify. In the same way, competing for top talent with salary figures alone is a risky strategy.

In today’s job market, attracting and retaining the best employees requires more than just competitive pay. Modern employers need a comprehensive employee benefits package.

Employee benefits are additional perks beyond an employee’s paycheck designed to support their well-being, job satisfaction, and overall happiness at work. Several common benefits have become standard for employees over the years, but which will give you an advantage over the competition?

Let’s explore 15 common types of employee benefits, how they work, and how they can impact your workforce — plus a few practical tips on managing benefits effectively to keep your workforce engaged and your business competitive.

Why Offer Employee Benefits?

Offering employee benefits isn’t just a nice perk. It’s a strategic move that can positively impact your business in several ways:

• Increased Retention - Employees are more likely to stay with a company that supports their personal and professional growth. Providing benefits that aid employees in their physical and financial health, their family life, and their career development can build long-term loyalty.
• Reduced Turnover - A strong benefits package provides employees with a sense of security. This reduces their likelihood of seeking opportunities elsewhere. Fewer resignations means less turnover, which lowers hiring and training costs.
• Higher Engagement - Engaged employees are more productive, innovative, and motivated. Benefits provide a sense of meaning and make employees feel valued, which increases engagement.
• Accelerated Recruiting - A strong benefits package is a deciding factor for many job seekers. In a competitive market, offering desirable benefits can make your business stand out, helping you attract top talent faster.
• Comply With Regulations - Some employee protections are legally required, like FMLA leave, overtime pay, and unemployment contributions. These aren’t technically “benefits” but are essential legal obligations. Depending on your company size, you may also need to provide health insurance or paid sick leave per labor laws.

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15 Most Common Employee Benefits to Offer in 2025

1. Health Insurance

Health insurance is a crucial benefit that helps cover the employee’s financial burden for medical expenses like doctor visits, hospital stays, and prescriptions. Employees enroll with an insurance provider and pay monthly premiums for coverage to have access to necessary healthcare services.

According to the Bureau of Labor Statistics (BLS), 72% of private-sector employees receive health insurance through their jobs. Under the Affordable Care Act, businesses with 50 or more workers must provide health insurance or face penalties. Smaller businesses can explore affordable options through the Small Business Health Options Program (SHOP).

Offering health insurance supports employee well-being and financial stability by reducing stress about medical expenses, which is especially valuable for employees with spouses or children.

How It Works

Most employers manage payment of healthcare insurance premiums through their payroll process. Health insurance is considered a pre-tax deduction, meaning you need to deduct premiums from an employee’s paycheck before calculating their taxable income.

Group rates tend to make health insurance more affordable than individual plans. Employers can partner with an established healthcare provider (like Aetna or Anthem), or self-fund their own health insurance plan. However, the self-funding option doesn’t work for every company. Since this is typically the most expensive benefit to provide, be sure to make the wisest budgetary decision.

Some companies also share premium costs or contribute to Health Savings Accounts (HSAs) to help employees manage out-of-pocket healthcare costs more effectively.

2. Dental Insurance

Dental insurance helps pay for important oral health services like cleanings, exams, fillings, and even braces in some plans. While not required by law, many employers offer dental insurance to create a more competitive benefits package. According to the BLS, 43% of private industry workers have access to dental insurance.

Since dental insurance is often more affordable than health insurance, it’s a budget-friendly way to increase employee satisfaction.

How It Works

Like health insurance, dental insurance is often managed through the payroll process. Employers also tend to share premium costs to make coverage even more accessible, and in many cases, group rates still apply.

Because it’s a pre-tax deduction, you will deduct any premiums for dental insurance before calculating taxable income. This saves money for both the employer and employee.

3. Vision Insurance

Vision insurance covers financial burdens for eye exams, glasses, contact lenses, and sometimes corrective surgeries like LASIK. This benefit is especially valuable for employees with vision needs or those working in screen-heavy roles.

According to the BLS, only 28% of private-sector workers have access to vision coverage. While no law requires this kind of benefit, offering it can set your company apart.

How It Works

Vision insurance premiums are not pre-tax, so you’ll need to calculate and deduct taxes from an employee’s paycheck before vision coverage premiums. However, employees can still deduct them when filing their taxes.

Including vision coverage shows a commitment to employee well-being and can help attract and retain top talent.

4. Paid Time Off (PTO)

Paid Time Off (PTO) is a common benefit that allows employees to take time away from work while still receiving their regular pay. PTO typically includes vacation time, sick leave, parental leave, and bereavement leave.

Employees who can take time off to rest, recharge, or handle personal matters tend to return more focused and productive. Offering at least 10-14 days of PTO per year can improve employee well-being and reduce burnout.

How It Works

PTO policies can be structured in different ways, such as with fixed annual days or accrual-based systems where employees earn PTO over time.

However you do it, an organized HR software system can help streamline time off requests and approvals and reduce administrative burdens. This also helps your business run smoothly, even when multiple employees request time off simultaneously.

Keep in mind that each state has specific laws regarding PTO accrual, usage, classification, and payouts (upon termination). Be sure to research laws in your state(s) to remain compliant.

5. Retirement Savings and Planning

Retirement savings plans, like 401(k) or 403(b) accounts, help employees save for the future. Employers will usually match a percentage of the employee’s contributions, which encourages long-term financial security. These plans also offer tax advantages that are appealing for both employers and employees.

Providing a comprehensive retirement savings plan demonstrates a long-term investment in your team’s financial well-being. It has the power to increase retention by making your company more attractive to career-minded individuals.

Plus, these accounts stay active after an employee leaves the company (even though contributions stop). Framing it as a lifetime benefit can be a very convincing recruitment offering.

How It Works

Depending on what kind of retirement savings account you use, you may be required to match a certain contribution (e.g. 3%). Be sure to remain compliant with laws in your industry.

Most 401(k) and 403(b) contributions are automated through payroll deductions. Employees must opt in to (or decline) a certain amount per paycheck, which should be listed on each paystub. Note that retirement savings IRA contributions are not taxable, meaning you can deduct them from a paycheck before calculating taxes, just like health insurance.

Employers can enhance the benefit by offering educational workshops on retirement planning or personalized financial advising.

6. Disability Insurance (Short- & Long-Term)

Disability insurance provides income replacement should an employee become unable to work due to illness or injury. Benefits typically cover 50-80% of an employee’s wages when paid out.

Including disability insurance as part of a benefits package demonstrates a strong commitment to employee security and well-being, providing peace of mind and promoting loyalty in the workforce.

How It Works

There are primarily two types of disability insurance:

• Short-Term Disability – These policies typically cover conditions like surgery recovery, pregnancy, or other temporary medical issues, usually for up to six months.
• Long-Term Disability - These policies cover severe or lasting conditions such as cancer, heart disease, or serious injuries — sometimes extending benefits for years (even covering retirement aid).

In some states, offering short-term disability insurance is mandatory, while long-term disability remains optional. Employers offering these benefits tend to pay part or all of the premiums, relieving employees of financial stress during health crises. In 2018, 85% of employees had short term disability (94% for long term) paid by the employers in full (BLS).

7. Workers’ Compensation

Workers’ compensation insurance provides financial protection for employees who are injured on the job. It ensures that employees receive necessary medical care and wage replacement if they are unable to work due to work-related injuries.

This benefit differs from disability insurance because employers must bear the entire cost by law, with no paycheck deductions. To take full advantage of the benefit, employees should be clearly informed about their coverage they have.

How It Works

Workers’ compensation is mandatory in nearly every state except Texas. Industries like agriculture, real estate, and LLCs may be exempt from these requirements, but even if it isn't required for your business, you should consider offering it to demonstrate a commitment to employee well-being.

8. Life Insurance

Life insurance provides financial support to an employee’s beneficiaries in the event of their death. The policy typically pays a designated amount (usually equivalent to the employee’s salary for one year) to help cover expenses.

Although less common than health insurance, life insurance is a valuable benefit and offers financial security for employees’ families. However, single employees might see less value in this benefit.

How It Works

Employers can pay for the life insurance policy in full or share the cost with employees. Coverage usually applies only while the employee is actively employed, and eligibility requirements vary.

Group life insurance plans often come with discounted rates and may be pre-tax, lowering taxable income.

9. Education Assistance

Education assistance covers costs like tuition, fees, books, and supplies for employees pursuing higher education. Employers may also offer student loan repayment or tuition reimbursement for continued learning.

Education assistance has many powerful effects including:

• Boosting employee upskilling efforts
• Enhancing company expertise
• Attracting motivated job seekers
• Investing in engagement via long-term growth and development

How It Works

Under Internal Revenue Code (IRC) Section 127, employers can offer up to $5,250 annually in tax-free educational assistance for qualifying courses. Other restrictions also apply — for instance, no more than 5% of assistance can go to owners with over a 5% company stake. There are several other evolving laws here, so research is essential for compliance.

To take full advantage of this benefit, employers need to integrate education assistance offerings into onboarding or professional development frameworks. Consider using student loan repayment as a hiring incentive or linking tuition reimbursement to career advancement programs.

10. Stock/Investment Opportunities

Offering employees the chance to purchase company stock at a set price gives them a financial stake in the business. This benefit can increase both their income and engagement by linking their success directly to the company’s performance.

This common offering also promotes financial literacy, especially for employees new to investing. It supports retention by encouraging long-term commitment to the organization.

How It Works

There are several types of stock plans, each with specific tax regulations, so be sure to consult legal counsel before implementing one.

Unvested shares are typically forfeited if an employee leaves the company, while vested shares can be exercised within a specific timeframe. Once exercised and purchased, these shares belong fully to the employee. However, it’s essential to understand associated timelines, tax implications, and company-specific policies that may affect this process.

Be sure to explain the program clearly to employees during onboarding and provide assistance with enrollment.

11. Flexible Work Hours / Remote Work

Since 2020, flexible and remote work have become more common than ever. Companies that adapt to changing expectations are better positioned for future success. While not suitable for all roles, flexible arrangements can reduce costs and widen the talent pool.

By allowing employees to set their own schedules or work remotely, you can improve productivity and job satisfaction with very little upfront cost. This flexibility is especially helpful for employees with caregiving responsibilities or non-traditional schedules.

How It Works

All working arrangements must have boundaries and limits. Be sure to establish clear policies, including communication standards, expected work hours, and resource accessibility.

In any remote work situation, an accessible, easy-to-use remote system is paramount. Whatever software you use, make sure your employees can get the resources and information they need to do their jobs well and remain engaged. In the absence of a physical location, user experience is key.

12. Rewards/Bonuses

Rewards and bonuses recognize employees for meeting key performance indicators (KPIs), achieving company goals, or demonstrating core values. These incentives can be monetary (e.g., commissions and sign-on bonuses) or non-monetary (e.g., trips, gift cards, or public recognition).

Offering a well-structured rewards program encourages desired behaviors while promoting engagement and loyalty.

How It Works

Bonuses build a culture of recognition and can drive motivation, especially in performance-based roles. However, since some rewards count as taxable income, be sure to report them to comply with federal and local tax laws. Some bonuses and commissions may also affect overtime payments.

To manage rewards effectively, use payroll software with accounting integrations to track and calculate payouts accurately.

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13. Company Relocation Reimbursement

Relocation reimbursement helps cover moving expenses whenever new or tenured employees must relocate for work. You may cover expenses such as gas, moving truck rentals, professional movers, temporary housing, home office setup, and even provide stipends for ongoing living costs.

For high-value positions where competition for talent is fierce, this benefit can be a game changer in recruitment. For a long-standing employee that is asked to move (i.e., to a different branch), this can ensure their retention through what may be a difficult transition.

How It Works

Reimbursement is typically provided after the employee has completed the move and submitted receipts for approved expenses. In that, employers can choose to cover all costs or set a maximum reimbursement limit. Since relocation reimbursement counts as taxable income, you'll also want to educate employees receiving this benefit accordingly.

However you choose to manage this common benefit, be transparent about your policy during the interview process to both manage expectations and take advantage of the enticement factor. Make sure to discuss the reimbursement process in detail during orientation and implement a straightforward system for submitting receipts to ensure timely repayments.

14. Access to Company Equipment

Providing employees with access to company equipment like printers, laptops, phones, and even company cars can be a valuable benefit. Though relatively low-cost compared to other benefits, this can boost employee productivity and satisfaction by reducing personal expenses.

How It Works

Any use of company property (especially for personal use) should be guided by clear policies. These documents should define acceptable use and limits to prevent misuse and manage costs. It is also a good idea to track usage of certain items with proper documentation, as all use of company property should be reported for accounting.

NOTE: Some equipment use may be considered imputed income, so include it on employees’ W-2 forms if applicable.

15. Gym Memberships / Wellness Program Discounts

Offering gym memberships or wellness program discounts supports employees’ physical and mental well-being. This could include partner gym access, yoga classes, mental health sessions, nutrition plans, and even onsite fitness facilities.

Having an onsite gym can save employees time and encourage a healthier lifestyle. Some companies may even receive health insurance discounts for offering wellness programs, which helps lower overall healthcare benefit costs.

How It Works

During onboarding, walk new employees through available wellness benefits and onsite fitness facilities if applicable. Show them how to enroll in programs or take advantage of discounts.

While obtaining partnerships with local gyms and wellness businesses may be simple, building an on-site gym is a big investment. Assess the goals of your compensation package(s) and decide what provides the most value to the organization as a whole.

How To Administer Benefits Packages

Administering employee benefits effectively ensures a positive employee experience while keeping your business compliant and competitive.

Ensure Accessibility and Equity

A benefits package that balances customization with fairness helps foster an equitable work environment. Core benefits like health, dental, and vision insurance should be offered to all employees, ensuring equal access to essential care.

While certain perks (like stock options or executive bonuses) may be reserved for higher-level employees, basic health and wellness benefits should remain consistent across the entire workforce. This approach builds trust and reinforces a supportive company culture.

Educate Employees About How To Use Benefits

Employees can’t take advantage of benefits if they don’t know what’s available. Clear communication is essential, starting with the recruiting process. Highlight key benefits during interviews to attract top talent.

During onboarding, provide a detailed benefits guide and hold informational sessions to explain coverage options, eligibility requirements, and how to enroll. You’ll want to make resources easy to access through a central employee portal so employees are aware.

Use Software To Manage Benefits Efficiently

Managing benefits manually can become overwhelming, especially as your company grows. HR software like Criterion HCM can simplify benefits administration. With our unified platform, you can create custom benefits packages by position, deploy them during onboarding, and streamline ongoing management.

Our automated HCM system helps track benefits enrollment, handle compliance requirements, process updates quickly, and much more. If you’re looking for a seamless experience for both HR teams and employees while reducing administrative overhead, Criterion is a top choice.

Final Thoughts

Offering employee benefits is essential to:

• Reduce recruiting costs
• Boost engagement
• Improve retention

But if managing benefits, deductions, or other forms of compensation feels overwhelming, you’re not alone. Modern HR teams need a platform that simplifies the process — a comprehensive system that can help you prioritize the needs of your workforce, ensure accurate payroll, and streamline benefits management at scale.

Criterion HCM is your complete human capital management solution. With Criterion, you can:

• Enable HR leaders to build custom benefits packages
• Calculate payroll accurately even with complex configurations
• Automate deductions
• Integrate seamlessly with ERP and accounting software
• Generate custom reports
• Much more

What to see how Criterion HCM can make managing benefits easier? Book a demo today.