{"id":7643,"date":"2024-12-02T14:11:47","date_gmt":"2024-12-02T21:11:47","guid":{"rendered":"https:\/\/compt.io\/?post_type=guide&p=7643"},"modified":"2026-03-12T16:15:09","modified_gmt":"2026-03-12T20:15:09","slug":"fringe-benefits-hr-guide","status":"publish","type":"guide","link":"https:\/\/compt.io\/guide\/fringe-benefits-hr-guide\/","title":{"rendered":"The 2025 Guide to Employee Fringe Benefits"},"content":{"rendered":"\n

Fringe benefits are a core part of how companies support employees beyond base salary. These employer-provided perks \u2014 from health insurance and retirement plans to stipends, reimbursements, and lifestyle benefits<\/a> \u2014 help employees manage real-life needs outside of work, improving well-being while strengthening retention<\/a> and engagement.<\/p>\n\n\n\n

\n

In an era when employees feel more disconnected from their jobs than ever before, Gallup<\/a> reports that better pay and benefits are one of the top drivers of job switching, with 54% of employees saying they are very important when considering a new opportunity.<\/p>\n<\/blockquote>\n\n\n\n

For employers, fringe benefits have become a practical way to strengthen compensation packages<\/a> without relying entirely on salary increases. As economic uncertainty rises, well-designed benefits programs help organizations stay competitive while keeping compensation spending predictable.<\/p>\n\n\n\n

In this guide, we\u2019ll explain what fringe benefits are, how they work, examples of common programs, and how employers calculate and manage them.<\/p>\n\n\n\n

What are employee fringe benefits?<\/strong><\/strong><\/h2>\n\n\n\n

Fringe benefits are perks an employer offers to employees in addition to their base salary. These benefits can be monetary or nonmonetary and may include offerings such as health insurance, wellness stipends<\/a>, paid time off, childcare support, retirement contributions, and other employer-sponsored programs.<\/p>\n\n\n\n

Fringe benefits vary widely by employer, industry, company size, and workforce needs, according to Compt\u2019s 2026 Annual Lifestyle Benefits Benchmark Report<\/a>. Some organizations focus on traditional benefits like insurance and retirement plans, while others offer more flexible programs designed to support employees\u2019 well-being, professional development, or family needs.<\/p>\n\n\n\n

\n \n \"2026\n <\/a>\n<\/div>\n\n\n\n

Common examples of employee fringe benefits<\/strong><\/h2>\n\n\n\n

Fringe benefits come in many forms, from traditional employer-sponsored programs to newer, more flexible benefits designed to support employees\u2019 everyday needs.<\/p>\n\n\n\n

According to the U.S. Bureau of Labor Statistics (BLS)<\/a>, fringe benefits account for roughly 29-30% of total employee compensation costs for private industry employers, highlighting how central benefits have become to modern compensation packages.<\/p>\n\n\n\n

Below are some of the most common examples of fringe benefits<\/a> offered by employers today.<\/p>\n\n\n\n

Health insurance<\/strong><\/h3>\n\n\n\n

Health insurance is one of the most important benefits employees look for when considering a job. Employer-sponsored health plans help employees access care at significantly lower costs and often extend coverage to spouses and dependents.<\/p>\n\n\n\n

Many employers also offer complementary health benefits<\/a> such as Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs), which are tax-advantaged accounts that allow employees to set aside pre-tax funds for qualifying medical expenses.<\/p>\n\n\n\n

Paid time off (PTO)<\/strong><\/h3>\n\n\n\n

While paid time off (PTO) is a standard employee fringe benefit, when supplemented by other intentional wellness supports, it can have a real impact.<\/p>\n\n\n\n

The benefits of taking time away from work show up for employees and their teams by increasing engagement, reducing absenteeism, and minimizing turnover.<\/p>\n\n\n\n

\n

\u00a0A 2025 study<\/a> by Florida Atlantic University and Cleveland State University found that offering PTO reduces the likelihood of quitting by 35% overall, with a greater reduction for men (41%) than women (25%).<\/p>\n<\/blockquote>\n\n\n\n

Financial wellness and retirement benefits<\/strong><\/h3>\n\n\n\n

Financial wellness programs<\/a> help employees build long-term financial stability. These programs often include educational resources such as budgeting tools, financial planning guidance, and access to services like debt management, credit-building support, wage advances, and financial counseling.<\/p>\n\n\n\n

In addition, most companies offer retirement plans such as 401(k) or 403(b) accounts with employer contribution matching.<\/p>\n\n\n\n

According to Vanguard\u2019s 2025 How America Saves report<\/a>, many employers are also expanding support beyond the traditional \u201cset-it-and-forget-it\u201d retirement model. The report found that 67% of participants<\/a> are invested in professionally managed allocations, helping employees make more informed investment decisions.<\/p>\n\n\n\n

Paid parental leave<\/strong><\/h3>\n\n\n\n

One of the most sought-after fringe benefits employees seek is paid parental leave. 2024 research from Parentaly<\/a> found that 94% of women consider a company\u2019s parental leave policy when accepting an offer, so if you don\u2019t offer any sort of paid parental benefit, you\u2019re definitely losing top talent to companies that do.<\/p>\n\n\n\n

Yet, according to the Center for American Progress, only 27% of private-sector workers<\/a> have access to it. Offering paid parental leave and other family-friendly benefits<\/a> demonstrates that you as an employer support employees through major life transitions and can strengthen both recruitment and retention.<\/p>\n\n\n\n

Paid leave is typically 12\u201316 weeks<\/a>, and some packages allow new parents to take additional time off if necessary. Regarding compensation, companies often offer employees about two-thirds of their original pay while they are on leave. Some companies provide full compensation during paid leave in the spirit of delivering the most attractive package.<\/p>\n\n\n\n

Paid parental leave should be a benefit inclusive of all employees<\/a>, so don\u2019t forget about adoptive parents, same-sex couples, blended and step families, and single fathers!<\/p>\n\n\n\n

\n
\n

Provide inclusive family benefits with stipends.<\/h3>\n\n\n\n

Learn practical ways to address pay inequity and offer inclusive family stipends that support women.<\/p>\n\n\n\n

\n
Get in touch with Compt<\/a><\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n

Lifestyle Spending Accounts<\/strong><\/h3>\n\n\n\n

A Lifestyle Spending Account (LSA)<\/a> is an employer-funded benefit that reimburses employees for approved lifestyle expenses across categories defined by the employer. LSAs are often used to support a wide range of employee needs, including wellness programs, professional development, family care, food and groceries, company swag, and everyday lifestyle expenses.<\/p>\n\n\n\n

Because LSAs are flexible by design, employees can apply funds toward resources that support their well-being, such as therapy, fitness programs, mindfulness apps, or other wellness-related expenses.<\/p>\n\n\n\n

Compt\u2019s 2026 Annual Lifestyle Benefits Benchmark Report<\/a> highlights a clear market preference for all-inclusive LSAs that reduce administrative friction and support a range of employee and culture needs:<\/p>\n\n\n\n