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Edited by: Kimberlee Leonard
 and Reviewed: Kimberlee Leonard

Types of Employee Benefits: 4 Examples

Author: | Nov 6, 2023

Editorial Note: We earn a commission from partner links on Go Sifter Advisor. Commissions do not affect our editors’ opinions or evaluations.

The types of employee benefits on the market are vital to understand as a small business owner. The four major ones are insurance, paid time off (PTO), retirement, and additional compensation. There are a few other examples of employee benefits such as remote work, tuition assistance, and travel stipends that some large corporations offer. When you are just starting out, however, providing the four well-known benefits will help you attract talent.

What Are Employee Benefits?

To understand the major 4 types of employee benefits you have to know what benefits are. In short, they are indirect forms of compensation for your staff. Companies offer services, programs, and policies to employees. This not only draws in potential new hires, but retains employees at the company for longer. Some are required by law, so it is important to have a breakdown of what is necessary to implement as a small business owner.

Advantages Of Providing These Types Of Employee Benefits For The Employer

Providing employee benefits has pluses not just for the workforce, but for the employer as well. Offering the 4 major types of employee benefits brings in top-notch candidates to your staff. Employees who are happy with comprehensive packages tend to stay longer at companies. Small businesses can save money because premiums on company benefits are tax deductible.

Workers with the 4 most popular types of employee benefits have a great sense of job security. This leads to more productivity and job-place satisfaction. By offering a robust benefits package employers can lower salary expectations because other indirect compensation is provided.

Advantages Of Providing These Types Of Employee Benefits To Staff

Happy workers are ones who feel taken care of with the types of employee benefits that make them feel cared for and protected. High quality medical and 401(k) retirement packages are examples of employee benefits that remove financial burdens for numerous workers. It also creates a healthier atmosphere at your business by providing everyone with a work-life balance.

4 Major Categories Of Employee Benefits

The major examples of employee benefits can be divided into four categories: healthcare, insurance, paid time off, and retirement packages. The following breaks down each one of the well-known types of employee benefits. It also examines some atypical examples of employee benefits such as additional compensation.


This category includes all forms of healthcare–medical, vision, dental–along with life and disability insurance. Health benefits address employees basic living needs, as well as their family’s overall wellbeing. Disability and life insurance providing funding for unpredictable scenarios, such as temporary or permanent changes for the employee.

Retirement Plans

Employees can contribute or save over time to prepare for retirement. One of the examples of employee benefits that workers love are when companies help invest in their futures along with them. Enrollment in retirement plans can entail support with automatic payroll deductions support, making contributions, and streamlining the preparation process for employees to retire.

Time Off 

Giving workers personal time off while still paying them is one of the best examples of employee benefits that an employer can offer. This includes holidays, sick leave, vacations, family leave, bereavement leave, and sabbaticals. Employers can expand their company policies regarding types of leave to go beyond any legal requirements in order to attract high caliber talent.

Additional Compensation

Types of employee benefits that catch potential new hires are the opportunity to earn additional wages. This can come in the form of bonuses, commissions, and awards for performance. Profit sharing and stock options are other examples of employee benefits that are indirect compensation.

Types Of Employee Benefits Every HR Practitioner Should Know

What are the four major types of employee benefits? You might know them as the business owner. Now the question is if your HR practitioner is familiar with these packages and offerings. It includes benefits at work, for health, and financial security, as well as lifestyle benefits.

Benefits At Work

These types of employee benefits relate to the on-job experience. Staff can be offered flexible working hours or unlimited PTO, professional development training, or food and beverages as incentives. Gifts and activities are also examples of employee benefits at work.

Benefits For Health

Examples of employee benefits for health in the traditional sense include medical, dental, and vision. Usually workers utilize these perks off the clock and on personal time. However, some companies supplement these offerings with specialized services like physiotherapy and chiropractic sessions, fertility treatments, or psychological support. 

Benefits For Financial Security

Workers need to feel stable in their finances both now and in the future. Retirement planning and saving for economic challenges are all things you can provide to your workforce. Retirement and pension plans, financial growth benefits, and personal finance packages are all examples of employee benefits for financial security.

Lifestyle Benefits

Easing the day-to-day grind for your staff can be a benefit in disguise. Mobility and work-life balance are examples of lifestyle benefits. Offering days to work from home or half-days in the office can make happier, more productive employees at your business.

Employee Benefits Best Practices

Best practices of employee benefits comes down to adapting your packages as your workforce changes and grows over time. Collect feedback from your employees to ensure the benefits you are providing are helpful and relevant. Are your lines of communication open with your staff? If not, figure out a new way to open the dialogue. 

Keep inclusion of the types of benefits you offer always in mind because inclusive benefits add to overall equity, internally and externally. Ease of use and personalization are key to offering the best types of employee benefits. Track and measure how your employees utilize the benefits your company provides while respecting privacy and discretion. 


Being a great place to work does not just mean offering a great salary. Providing the 4 major types of employee benefits acts as a magnet for talent to your company. It also keeps workers already on staff in good spirits because they feel like they are taken care of and cared for by their employer. By offering examples of employee benefits outlined above you will find your workforce is more productive, happier, and consistent.


What is the most common type of employee benefit?

The four most common types of employee benefits are insurance, paid time off (PTO), retirement, and additional compensation.

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