If given the choice would employees take a larger salary or a benefits plan? Well, according to a 2011 study, 50% of people surveyed in Canada would rather have benefits than a $15,000 salary increase. Truthfully it’s a very good thing that employees prefer benefits to higher salary, because employers who offer benefits see higher retention in their employees. Not to mention, benefits are a more affordable way for employers to reward their employees than a pay raise.
Five Reasons Benefits Are More Valued Than Pay Raises
- Benefits are non-taxable, which means employees get to enjoy every cent spent on their benefit package.
- Employers can receive health insurance payment deductibles on their taxes.
- A 5% pay raise costs an employer up to 16% more on payroll taxes, while the employee loses 42% of that raise to the government.
- A good benefits package makes companies, especially small businesses, more desirable to potential employees.
- Group plans are customizable through many companies.
Companies like Benecaid offer flexible and custom benefit plans and Health Spending Accounts. An HSA is similar to a bank account, in that an employer creates employee accounts with each having a set amount of money for the employee to spend on medical expenses. In this model, employees choose how to spend their benefits – for example, someone with perfect eyesight may want to accord more money to dental work.
HSA benefits are a win-win situation for employees and employers since benefits are non-taxable for employees, tax deductible for employers, offer a fixed cost with no renewal increase, and are highly customizable for each employee.
If that sounds like a solution for you, contact a reputable broker, like a Benecaid advisor, today to start an HSA account.