10 Best Employee Benefits You Should Offer & Why

One way to make your company more attractive to job seekers and more supportive for current employees is by offering competitive employee benefits. Most business owners know about health insurance and 401(k) plans, but there are plenty of other benefits that can help with recruiting, retention, and morale.

Here are some of the best employee benefits small businesses can offer.

Why You Should Offer Competitive Employee Benefits

Competitive employee benefits can help businesses attract applicants, retain employees, and support morale. Benefits are not just extra perks; they can affect how employees feel about their work, their financial stability, and their long-term commitment to your business.

Gallup’s 2026 State of the Global Workplace report found that global employee engagement fell to 20% in 2025, its lowest level since 2020. Gallup has also consistently linked employee engagement to business outcomes such as retention, absenteeism, productivity, profitability, and sales. Strong benefits alone will not fix every workplace problem, but they can be an important part of a healthier, more competitive employee experience.

Top 10 Benefits Employers Should Offer

Employers should offer a mixture of practical benefits and more unique benefits to support recruiting, retention, and employee satisfaction.

Here are some of the best employee benefits that you should consider as a business owner:

1) 401(k) Matching

Many workers still lack adequate retirement savings, making a 401(k) match a valuable benefit for recruiting and retention. Some employees may not prioritize retirement savings without an employer-sponsored plan or matching incentive.

While employees may have modest individual retirement accounts, there is a difference between an IRA and 401(k). Offering a matching program incentivizes employees to make modest tax-advantaged payroll contributions from their paychecks that can pay long-term benefits.

The prospect of saving for the future can be daunting for many workers (and, at times, very difficult), but this can be a valuable benefit with long-term employee impact.

2) Strong Healthcare Options

One of the most important benefits a company can offer is small business health insurance. In the US, employer-sponsored health insurance can be a major factor in recruiting and retention. Make sure that your plans have reasonable deductibles, copays, and out-of-pocket costs. Go the extra mile and include additional insurance for things like dental and vision coverage.

A 2024 KFF/Peterson-KFF analysis estimated that people in the US owe at least $220 billion in medical debt. Having good health insurance options results in healthier employees who are more likely to seek preventive and routine care.

Consider offering FSA or HSA options as well.

3) Flexible PTO

Paid time off is often a sticking point for companies and employees when negotiating pay and benefits. Many companies, including some of the country’s biggest, have started offering flexible or unlimited PTO policies.

On the surface, that might sound absurd, but some employers find that flexible PTO reduces end-of-year PTO pressure, but the policy needs clear expectations and manager support to work well.

It can also reduce the end-of-year scramble to use remaining PTO.

4) Flexible Schedule

Assuming you have a business that doesn’t require employees to be on-site full-time, give your employees the flexibility to work remotely, use hybrid schedules, or adjust work hours when possible.

For employees struggling to work around childcare needs or who may have a stressful commute, this flexibility can dramatically help their morale.

Since remote and hybrid work became more common, many businesses have found that flexible work arrangements can support productivity and morale. In some cases, having a remote workforce can even reduce overhead costs.

5) Tuition Reimbursement

Tuition reimbursement and student loan repayment assistance can help employees manage education costs while encouraging skill development. Employers can generally provide up to $5,250 per employee per year in tax-free educational assistance under a qualifying program.

Offering tuition reimbursement can provide meaningful financial support. What’s more, it can provide more practical help than even a higher salary might.

6) Mental Health & Wellness Benefits

Mental health and wellness benefits can include employee assistance programs, counseling benefits, wellness stipends, stress-management resources, gym memberships, or mental health app subscriptions.

These benefits can support employees’ overall well-being and may be especially valuable for small businesses that want to offer meaningful support without building a large benefits program from scratch.

7) Stock Options Or Company Equity

For some businesses, stock options or company equity can help employees feel more invested in the company’s long-term success.

Giving your employees stock options or equity in the company makes it so there is a very tangible benefit to helping the business succeed. It makes individuals feel more of a part of the business, too.

8) Work Perks Or Expenses

Covering work-related expenses can be a practical employee benefit. If there is hardware or software that is required to do the job, providing required equipment at no cost to employees is often expected.

Some reimbursements may be deductible or treated as business expenses, depending on the expense and tax rules. There are other monthly or yearly expenses that your company can pick up that can act as a big incentive to current or potential workers. Phone stipends, mileage reimbursement, home office support, or other work-related expense reimbursements can help your employees feel appreciated.

9) Life Insurance

Many workers are uninsured or underinsured when it comes to life insurance, making employer-provided coverage a valuable benefit. Some employees may not think about life insurance until later in life. That’s why offering a basic group life insurance policy can be a meaningful way to support employees and provide coverage they may not have purchased on their own.

10) Appreciation Gifts

Small tokens of appreciation can support morale and recognition. Even in supportive workplaces, employees can feel overlooked without regular recognition.

Tokens of recognition, either in the form of small bonuses, gift cards, or other gifts can be a great way to let everyone on your staff know you appreciate them. You can time them with Employee Appreciation Day, work anniversaries, birthdays, or major milestones.

How To Start Offering Employee Benefits

Many of the benefits mentioned in this post are easy to set up. For those, it’s simply a matter of figuring out how much you want to budget throughout the year to invest in employee benefits.

Some, however, like healthcare and 401(k) matching, can be a little trickier. You’ll need to talk with your HR team, benefits broker, payroll provider, accountant, or financial advisor to figure out what your total annual costs will be and what the best plans are for your workforce. If you need help in that department, you can also check out some of the best HR software options.

And if you’re looking for other creative ways to potentially cut costs and keep employee morale high, remote or hybrid work may also be a useful benefit, depending on the role.

Remember, these aren’t just added expenses. These are investments in the overall health and happiness of your employees, and they can lead to long-term value through stronger retention, morale, and recruiting. As the demand for good employees increases, a few extra perks in a job package can go a long way.