Workplace Benefits
This lesson was made possible thanks to Pacific Life Insurance Company
When you start looking for a job, one of the first questions you will have when browsing job listings is “how much does this pay”? Starting salary or hourly pay is, of course, an important factor when considering a position, but is very far from the full story.
This lesson will cover some of the other common workplace benefits to look for when exploring your career – and how to balance “benefits” vs “salary” when considering a new job.
What are Workplace Benefits?
Workplace Benefits are all the “perks” your job offers beyond the paycheck. They can be broadly categorized into 4 main types: Insurance Benefits, Retirement Benefits, and Savings Benefits, and Quality of Life Benefits.
Insurance Benefits
Insurance Benefits are when a company offers insurance coverage to their employees. This can include:
- Health Insurance: Many mid- to large-sized companies offer group health insurance plans, which often have cheaper and better benefits than what you can purchase on your own.
- Life Insurance: Many companies also offer group life insurance policies, covering some or all of the premiums.
- Disability Insurance: Many companies also offer some form of short-term and/or long-term disability insurance, which may also cover part of your wages if you get injured or take parental leave.
Retirement Benefits
“Retirement Benefits” are workplace benefits offered to employees to help support them in retirement. Most retirement benefits fall into two categories: Defined Benefit or Defined Contribution.
- Defined Benefit: Some employers offer a defined benefit, or pension plan, where you get monthly payments constantly after you retire. The payments are based on how much you earned before you retired, and how long you worked for the company. It is called “Defined Benefit” because exactly how much you get paid in retirement is “defined” (and it is up to the company to make sure you get it).
- Defined Contribution: Other companies offer defined contribution plans, usually 401(k) in the United States or RRSP in Canada. With these plans, you make contributions to your own retirement account, and your employer “matches” your contributions up to a certain level of your salary. It is called “Defined Contribution” because your company knows exactly how much it needs to contribute to your account, but they are not responsible for how much you end up being able to withdraw in retirement.
Savings Benefits
Savings Benefits are workplace benefits offered to either save employees cold, hard cash, or take advantage of special types of tax-advantaged savings accounts. These can include:
- Health/Flexible Savings Accounts: These are tax-advantaged savings accounts to help pay for health expenses.
- Childcare: Some large companies offer on-site childcare or reimbursement for some daycare costs.
- Tuition Reimbursement: Some companies will also pay you back for education costs if you go back to school while working.
Quality of Life Benefits
Last, but not least, are the Quality of Life workplace benefits offered by employers. These benefits might be the hardest to place a “dollar amount” on, but can make or break your experience working for a company – and so should not be ignored. These can include:
- Paid Time Off: This includes paid vacation, paid sick days, paid personal days.
- Flexible Work: This may mean full or partial time working from home, or the ability to start/finish your workday earlier or later than the standard “business hours” to accommodate your personal needs.
There are a lot of workplace benefits out there – and when you add them all up, they can be an even bigger factor than salary on where you want to work!