Your annual salary is not the only thing you should consider when it comes to your compensation at work. You also need to take a serious look at the other available employee benefits in your boring onboarding handbook. Informal perks could exist that you don’t know about!

Hopefully you’re taking full advantage of all of the stuff that’s important to you. But if you’re not, realize that underutilizing those benefits can be akin to leaving money on the table (and possibly even more money than you realize due to their tax advantages)! You may not be interested in every single option. But it’s at least worth doing a little digging to see what sweet additional employee benefits are available to you.

Common Employee Benefits to Look For:

Alright, let’s start talking about the most beneficial benefits (yep, I went there) and how you can use them to your full advantage. Some of these are easy to quantify. But we’ll also cover the secondary benefits that are harder to assess in value, but can still really add up and be incredibly meaningful.

1. 401k, 403b, TSP, etc.

We talk about this a lot on our show (401k contributions are one of the earliest money gears). Getting a match is obviously the big perk if your employer offers one. So don’t leave that contribution match just sitting there, it could be worth hundreds of thousands of dollars over your career.

Outside of an employer match, there might be other little things available within your workplace retirement plan that you haven’t checked out yet…

  • Automatic increases. Sounds like not a big deal, right? But it definitely is. Increasing contributions slowly and automating your finances helps you overcome the behavioral ineptitude that we all face. It’s tough to manually increase what we’re investing every year. Oftentimes we either forget or just end up spending that money instead. But many 401k plans will allow you to automatically increase the % of your pay that you put into your retirement plan without having to think about it.
  • Low cost index funds. Instead of old school, fee ridden mutual funds, more retirement plan administrators are beginning to offer cheaper index alternatives. These passively managed investment funds not only are cheaper due to less fees, they usually outperform actively managed mutual funds! It’s always worth checking your 401k/403b investment options to make sure you’re avoiding dumb fees whenever possible.
  • Roth or After-tax Contribution Options. Roth 401ks are becoming more common too, which could make sense depending on your income tax bracket. Always check to see if your employer offers a Roth 401k and run the numbers. 

Yes, 401ks are boring and getting the right plan information from HR can be a pain. But it’s definitely worth checking because it could mean the difference between retiring a millionaire vs. living in a van down by the river!

2. Help Paying Down Student Loans

Some employers are helping pay down student loan balances for employees. Your employer can pay $5250 annually towards your student loan balance and the best part: it doesn’t count towards your taxable income!

This employee perk is becoming more common and could be massively beneficial to many young people in the workforce today. It helps them eradicate mountains of student loan debt far faster than they would otherwise be able to. Payments can go directly to the employee, or the student loan lender.

3. HSA & FSA

Both these accounts are widely availably but are also typically underutilized. You can snag significant tax benefits if you use them wisely.

HSA’s in particular (if you have a high-deductible healthcare plan) are like having another tax-advantaged retirement account at your disposal. They’re actually the most advantaged accounts that currently exist. If you are curious about how you can use that HSA to propel you towards financial independence, we explain all the benefits in detail here regarding the HSA Triple Tax Advantage.

FSA’s have an even longer history and offer benefits that go beyond just healthcare expenses. You can open a healthcare AND dependent care FSA as a way to avoid income tax on the money you will spend this year on healthcare expenses and daycare. If you max these out you’ll avoid tax on $7,750 in earnings. That’s nothing to sneeze at!

But be careful, don’t sock more money in an FSA than you’ll actually be able to spend in a given calendar year. Unlike the HSA, your FSA money can expire at the end of the calendar year if it’s not fully used up.

4. ESPP (Employee Stock Purchase Plan)

About half of all publicly traded companies offer some type of stock purchase program. Some people have access and others don’t. If you do and you use it properly this can be another solid benefit worth taking advantage of.

The way most ESPPs work is that the company gives you some type of discount to buy lots of their stock. Usually there is some minimum holding period, then you can sell the stock or continue to hold it. For example, let’s say a company has stock that trades at $100 per share. In the ESPP, you are allowed to buy shares at a 15% discount (so, $85 instead of $100), but you have to hold the stock for 90 days. After 90 days, if the share price has stayed the same, you could sell the shares for market rate ($100 still) and you’ve just made a $15 profit.

Not all ESPPs are great deals, so look it over and make sure you chat with trustworthy money folks if you are at all confused. And be sure to check out this article if you are completely new to investing.

5. Life Insurance

Many employers offer access to at least some amount of free life insurance coverage. This isn’t a major perk as term life insurance is already pretty cheap and the free employer insurance likely doesn’t cover all of your life insurance needs. Employer life insurance is particuarly helpful if you can’t buy coverage on the open market because of your medical history. Still, even a tiny life insurance policy (for free!) is something you should take advantage of.

In addition to that free amount your employer offers, we recommend always snagging your own by shopping on a site like Policygenius. You’ll likely have the choice to pay for more life insurance via your employer, but that’s a bad deal in almost all cases! It’s cheaper to shop for your own policy most of the time. Plus, that policy sticks with you even if you end up leaving your employer, which is very important.

Next Step: Shop free quotes with Policygenius (it takes like 2 mins)

6. Flexible Hours

FRACTL did a survey and found that flexibility is the #2 most desired benefit right behind better health, dental, & vision insurance!

Some workplaces want you at your desk from 9-5 no matter what. Scheduling a morning dentist appointment is out of the question! But other employers won’t make you take a chunk of PTO just for showing up a touch late or shifting your schedule around for personal needs. That’s a real benefit so make sure to recognize it as such.

7. Vacation Policies

Let’s briefly talk about unlimited vacation policies and how they aren’t always what they are cracked up to be. If your company offers a PTO policy like this, make sure that you don’t neglect *actually taking* vacations. A lot of folks who have unlimited PTO policies often feel bad taking the vacation they deserve.

In our eyes, not maxing out your vacation policy is like not maxing out your 401k match. It’s a benefit that’s a part of your package and you should take full advantage of it. Plus, studies show that employees who take their vacation time are more productive and are also more likely to receive a raise or bonus. Not taking vacation could be costing you in multiple ways!

8. Free counseling & Wellness Initiatives

Some employers even offer their own on-site gyms! One of my friends recently posted that her employer just constructed an office gym for employees. This allowed her to ditch the gym membership she had been paying for. Whether you want to work out or get some counseling, check and see what your employer offers on that front.

9. Shopping Discounts!

Your employer might have partners that give special discounts as part of your employee benefits package. Cheap cell phone plans, electronic retailers, etc. You might be able to get 10% off an Apple or Dell product or 20% off your internet bill with major carriers. My former employer offered discounted memberships to the zoo & aquarium. It’s worth taking 30 minutes to dig into those offerings, especially if you’re already planning to make a purchase.

10. Advanced Education

Starbucks is one of the employers that has done an incredible job on this front. They offer higher education opportunities to employees that work more than 20 hours a week. They get 100% tuition reimbursement for classes taken at ASU. Your employer might offer continuing ed classes and/or might be willing to pay for you to go back to school. It never hurts to ask!

USE Your Employee Benefits

It’s important to note that the benefits your employer offers are put in place to help retain talent (aka YOU 🫵). They want to make their workforce happy! And so if there’s a benefit that we’ve mentioned that you have access to but are nervous about using, don’t be! Your employer wants to see you take advantage of the perks they offer.

Also, if you want something that they don’t currently offer, it’s ok to bring that up with HR (politely, obviously). Ask them if they know about the tax break that allows employers to help their employees pay off student loans and how big of a difference it might make for you and other employees. Benefits aren’t necessarily static. And if you approach that convo well, you could have an impact on helping your employer modernize their benefit offerings and making them more tailored to the workforce that they are hoping to attract.

The Bottom Line

Paychecks are the main reason we all show up at work. But your total compensation package goes way beyond that annual salary piece when you add in all the employee benefits.

Especially if you are in the job market looking for a new position, it’s really important to dissect not just that up-front salary number but to assess the additional employee benefits that are being offered to you also. You might find that a job with a $5k higher starting salary is actually worse for you financially than another job purely based on how the benefits stack up.

Beer tasting notes:

employee benefits discussion

While discussing these employee benefits we enjoyed a Koko Buni by Creature Comforts. Cheers! Also, we could really use your help to spread the word- let friends and family know about How to Money! Hit the share button, subscribe if you’re not already a regular. And please consider giving us a quick review in Apple Podcasts or wherever you get your podcasts. Help us to spread the word to get more people doing smart things with their money in these difficult times!

Best friends out!

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