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Low-Cost​ Benefits to Offer Your Employees

low cost benefits to offer your employees
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One of the most important ways to retain employees is by offering benefits. As a small business, you may not be able to offer the same benefits as large companies. However, you may be able to offer some benefits and perks as your small business grows. Although it may be costly to acquire some benefits, there are some low-cost benefit options. 

Flexible spending

Flexible spending accounts (FSA) allow employees to contribute to an account with pre-tax dollars meaning employees don’t pay taxes on this money. You may be able to get your employees a credit or debit card to use for medical expenses. However, they may have to submit receipts to show proof of purchases.

Here are the different FSA accounts:

  • Medical expenses – This type of account will pay for anything your insurance doesn’t cover such as co-pays, deductibles, and prescriptions. It even covers some over-the-counter products like bandages, blood pressure machines, etc. There is even an online store where your employees can purchase products. There is a period in which your employees have to use their funds, but you may be able to extend it or allow them to carry amounts over $500. 
  • Dependent care – An employee can contribute up to a certain dollar amount to pay for dependent care. In most cases this means daycare expenses for children under 13, but some plans allow for adult care.  
  • Health premiums – This can be used when employees have no insurance coverage. 
  • Adoption – In some cases, the employer can offer FSA to help cover adoption expenses. 

Research different FSA plans to see what fits best with your budget and your employees. 


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Paid Leave

Most employers offer their employees some type of paid leave. Employers offer different options such as vacations, holidays, sick days, or personal time. If you can’t offer medical insurance or FSA, then consider extending your paid leave. After insurance, many employees want paid vacations and holidays as one of their top benefits. A good vacation plan can retain top employees. 

Consider thinking about implementing a plan where those who have more seniority get more vacation days. If your business is able, consider offering all national holidays off as well.


There are different options for offering retirement. The most common one is 401(k), which you match up to a certain percentage they contribute with their pre-tax dollars. You will not manage the account, but you will work with an investment company who will do this for you. There are other plans like IRAs you can offer if you can’t match their contributions. 

You may also be able to receive tax breaks for having a retirement savings plan. 

Tuition Reimbursement 

If you are able to give tuition reimbursement, consider offering this for school or training programs. You can put stipulations to this as well. For example, you can specify the type of college courses or programs which would help your business. You can also state on your policy that they must take approved coursework and they must pass the class to get reimbursed. Research best practices and policies to help you offer the best plan. 

If you follow guidelines by the IRS, you can also receive tax breaks on college tuition reimbursement. 

Consider offering training reimbursement if you don’t want to offer tuition reimbursement. You may find that is a better low-cost option for you. Also, you would have more control of the type of training classes they are taking to fit your business needs. It is important to write a policy and be specific regarding what type of training you will pay for and how they can be reimbursed. 

You should also ensure your policy states that they should pass their classes too. Some states and cities even offer training tax breaks, so it is important to research those options. 

Wellness for a Low-Cost Benefit

There are many options that provide wellness to your employees. For example, once a month you could bring in a masseuse to do back massages on your employees. You could also offer exercise or yoga classes if you have the space. You may even consider offering gym memberships. Some gyms give you a discount for a certain number of employees who sign up. 

Also, it would be fun to participate in fun runs or walks around the area. Wear matching t-shirts advertising your business. You could encourage everyone to count their steps and offer prizes for participating in wellness activities. 

Encourage wellness in your business and encourage your employees to bring different ideas to you for consideration.  

Medical Insurance

Although offering medical insurance is not a low-cost option, ensure you research different plans to see if there is something you can offer. You will need to gather information such as what you can contribute and what type of plans you would like. Even if you can’t contribute much, there may be high deductible plans which you can offer your employees. 

Here are some options:

  • Research the marketplace. Currently the government offers Small Business Health Options Program (SHOP). It is for businesses with less than 50 employees. There are several flexible options you can choose from. 
  • Work with a broker. There are several insurance brokers or agents who will give you prices based upon your employee count and what you need. They research top insurance companies to find the best plan for you. 
  • Contact insurance companies directly. If you don’t want to work with a broker or the government plan, many insurance companies offer small business plans and you pay them directly.

Other Low-Cost Benefits and Perks to Consider

There are many benefits or perks you can offer your employees that may fit your budget better and motivate your workforce. Some of these include:

  • Flexible hours – If your employees need flexibility this is a great low-cost benefit option to add if you can. Some employees would give up a lot to have a flexible schedule. Consider investing in a time tracking app for small business like ezClocker which keeps customer information and schedules appointments and tasks for your employees. It will also help manage your employee’s timesheets instead of manually tracking their time. You will be able to track their flexible schedules easier. They can clock in and out from their phones anywhere and there is a GPS so you can verify their location. 
  • Identity theft protections – This benefit is offered by 36% of employers because many feel they have more security issues with higher technology.  Find out from your employees if identity theft protection is important to them. Research business plans at major credit monitoring services. 
  • Pet insurance – There are even pet insurance programs which allow employee withholding options. It has become a great option for those who hire millennials. If your business is pet friendly, this would be a great benefit to have. 
  • Food – Keep stocked items in a kitchen like fruit, tea, and coffee. Think about letting them have a drink on Friday and celebrate the week’s accomplishments together. 
  • Music, Reading, or Movies – Consider offering a music membership like Spotify or Apple Music. You may be able to offer a Netflix plan or another movie plan. Think about offering them an Audible or Kindle package for reading. 

Final Thoughts on Low-Cost Benefits

You may not be able to offer health insurance or retirement until your business grows more. You should, however, talk to a tax advisor to find out what tax breaks you get for the plans or low-cost benefits you are considering. 

Contemplate different and creative ways to help motivate and encourage your workforce. Research best practices and consider your budget.



Author: Kimberley Kay Travis

Kim Travis has over 20 years of experience in business, human resource management, and leadership roles. She has specialized knowledge in employment law, employee relations, recruiting, management consulting, small business growth, leadership development, workplace safety and health programs, and writing business content.