From optional to crucial business compensation
40 years ago, Employee Benefit plans were a nice thing to have. Today Employee Benefit plans are a crucial component of your business’s compensation package.
Benefit plans help to ensure the health and wellness of your most valuable assets, your employees, while increasing employee involvement, reducing turnover, decreasing absenteeism, improving morale, and increasing happiness and productivity in your workplace.
Employees without a Group Benefit plan in place put more value in Group Benefit coverage than a raise. A recent Healthcare Survey shows that even when offered a substantial amount of money, the majority of employees choose a Group Benefit plan over cash.
Group Benefit plans are a tax-deductible expense for the business and thus are a cost-effective method of compensating and protecting employees. Here are two situations for an employee (we’ll call her Jessica) making $43,000 a year:
Jessica’s employer pays an extra $1,000 in salary plus $90 for CPP, EI and workers compensation.
Result: Jessica gets $649 after deductions for CPP, EI and federal and provincial taxes.
Jessica’s employer puts the $1,000 into a health plan. This is a tax-deductible business expense the employer can claim.
Result: Jessica gets $1,000 worth of health coverage, tax-free.