What are employee benefits?
Employee benefits are the extras employees receive on top of their salary. These can include pensions, paid holiday, sick pay, flexible working, or private healthcare.
Some are mandatory employee benefits required by UK law, while others are optional employee perks designed to improve retention, wellbeing, and employee satisfaction.
Statutory vs voluntary employee benefits
Employee benefits usually fall into two groups: statutory and voluntary.
Statutory employee benefits are legal requirements UK employers must provide. Voluntary employee benefits are optional perks businesses offer to attract and retain staff.
| Statutory employee benefits |
Voluntary employee benefits |
| Paid annual leave |
Private healthcare |
| Workplace pension |
Gym memberships |
| Statutory Sick Pay |
Flexible working perks |
| Maternity and paternity pay |
Bonuses and rewards |
| Minimum wage protections |
Extra holiday days |
Many SMEs combine both to build a balanced employee benefits package that supports staff without stretching budgets too far.
Types of employee benefits
Employee benefits usually fall into four main categories:
- Financial benefits - Bonuses, pensions, life insurance
- Health benefits - Private healthcare, wellbeing support, EAPs
- Lifestyle perks - Flexible working, gym memberships, extra holiday
- Career benefits - Training budgets, qualifications, mentoring
Flexible working has become one of the most valued employee perks in the UK. According to CIPD’s Flexible and Hybrid Working Report, 91% of UK employers now offer some form of flexible working arrangement.
For SMEs, the best employee benefits package is usually the one employees actually use, not the one that simply looks fancy in a job advert.
Why employee benefits matter (more than you might think)
A strong employee benefits package helps businesses do more than just keep employees happy. It can improve:
For SMEs, employee perks can also help compete with larger employers without matching huge salaries. Flexible working, wellbeing support, and enhanced leave policies are often highly valued.
Research from Aviva’s Work Life Balance Report found that 88% of employees said workplace benefits improve their overall happiness at work.
How to build an employee benefits package
The best employee benefits package is not really the most expensive. It is the one employees genuinely value and use.
Start with the essentials:
- Cover all statutory employee benefits
- Ask employees what matters to them
- Focus on practical perks employees will actually use
- Balance wellbeing, flexibility, and financial support
- Review benefits regularly as the business grows
Employee benefits example
A marketing agency in Leeds noticed staff turnover rising after a busy year. The owner, Sarah, could not compete with London-level salaries, so she improved the company’s employee benefits package instead.
The business introduced:
- Flexible start and finish times
- An extra wellbeing day each quarter
- A £500 annual training budget
Within six months, employees were taking fewer sick days, and staff retention also improved. For the team, the smaller employee perks felt more personal - and honestly, more useful than flashy corporate extras nobody asked for.
At Black Piano, we understand the statutory benefits in India and offer additional ones to ensure the utmost wellbeing and happiness of your remote team. No wonder we are maintaining a 98% retention rate year after year! Learn more about our services.
