Employee benefits are perks provided to employees in addition to their salaries. Benefits are varied and the exact benefits that employees can enjoy are usually set out in employment contracts.
A good employee benefits package can be instrumental in attracting, recruiting and retaining talented employees as well as in boosting employee satisfaction and morale. Certain benefits are more costly than others, but the bottom line is that offering benefits goes a long way in ensuring employee engagement and job satisfaction.
This article outlines some of the most common benefits offered to employees in the UK.
In the UK, statutory entitlements are benefits that employees are legally entitled to.
Paid Annual Leave and Other Paid Leave
Paid leave and holiday entitlement are statutory benefits and include annual leave, sick leave (and statutory sick pay), maternity and paternity leave and bank holidays. Exact details of annual leave, including how many days off an employee is entitled to, will be set out in the employment contract. By law, employees are entitled to at least 28 days of paid leave.
In the UK, employers must offer employees pension plans if the employee is over 22 years of age and earns more than £10,000 a year. Enrolment in pension plans allows employees to save for retirement, and contributions are pooled towards a pot of financial support that employees can access at retirement. Employers must make a statutory minimum contribution of 3% each month. Details of the pension plan and pension provider are set out in employment contracts.
Employers can choose to offer employees a wide range of discretionary or voluntary benefits in addition to statutory benefits.
Health insurance is a commonly offered employee benefit and allows employees quick and easy access to healthcare services and treatment. While all UK citizens can access healthcare provided by the national health service (NHS), waiting lists are often long. Employee health insurance policies are in place to ensure that employees do not face delayed treatment.
Private medical insurance is usually the most important aspect of a health insurance offering. This covers the cost of the employee's treatment at private medical facilities. Dental insurance, mental health support, access to specialist healthcare services, yearly check-ups and optometrist vouchers might also be offered as part of the overall health insurance package or as separate health benefits.
Many employers offer free or discounted gym memberships at local gyms. Employers who are not able to do so can set up employee sports teams and competitions as an alternative.
Flexible working has been particularly popular since the COVID-19 pandemic. In the UK, employees can currently request flexible working if they have built up 26 weeks of continuous employment with the same employer. Employers are not obliged to accept the request, but must assess it against certain criteria and provide the employee with an explanation if the request is denied.
Employers who offer flexible working as a benefit demonstrate flexibility and an understanding that not all employees are able to work traditional hours. A flexible working policy can include flexi-hours (banking extra hours worked on a particular day and taking them off another), working from home and part-time work.
Life insurance is also a commonly offered benefit. It is a lump-sum payment that is made to an employee's dependants in the event of the employee's death. This is a relatively more expensive benefit, but signals to employees that the employer is compassionate. It is also likely to boost employee retention.
Employees working in industries that require frequent travel will often be provided with a company car or other vehicle.
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The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.