If given the choice would employees take a larger salary or a benefits plan? Well, according to a 2011 study, 50% of people surveyed in Canada would rather have benefits than a $15,000 salary increase. Truthfully it’s a very good thing that employees prefer benefits to higher salary, because employers who offer benefits see higher retention in their employees. Not to mention, benefits are a more affordable way for employers to reward their employees than a pay raise.

Five Reasons Benefits Are More Valued Than Pay Raises

1. Benefits are non-taxable, which means employees get to enjoy every cent spent on their benefit package.
2. Employers can receive health insurance payment deductibles on their taxes.
3. A 5% pay raise costs an employer up to 16% more on payroll taxes, while the employee loses 42% of that raise to the government.
4. A good benefits package makes companies, especially small businesses, more desirable to potential employees.
5. Group plans are customizable through many companies.

Companies like Benecaid offer flexible and custom benefit plans and Health Spending Accounts. An HSA is similar to a bank account, in that an employer creates employee accounts with each having a set amount of money for the employee to spend on medical expenses. In this model, employees choose how to spend their benefits – for example, someone with perfect eyesight may want to accord more money to dental work.
HSA benefits are a win-win situation for employees and employers since benefits are non-taxable for employees, tax deductible for employers, offer a fixed cost with no renewal increase, and are highly customizable for each employee.
If that sounds like a solution for you, contact a reputable broker, like a Benecaid advisor, today to start an HSA account.