What are employee benefits?

Employee benefits are added perks an employer offers on top of your regular pay. They’re common in competitive industries, where companies offer extra benefits to attract and retain top talent. Roles in government also tend to offer good employee benefits.

Employee benefit examples include free breakfasts, gym memberships and work-from-home flexibility. While these typically apply to permanent full-time and part-time employees, sometimes employers offer benefits to casual and contract workers too. In this article, we take a look at the most common types of employee benefits in Australia and what they mean for employees.

Employee benefits in Australia

Any perks your employer gives you on top of your usual salary are classed as employee benefits. In Australia, employee benefits can include:

• Discounts and subsidies
• Extra leave
• WFH flexibility
• Bonuses
• Allowances
• Workplace perks
• Skills training or education
• Employee support

By offering perks that other companies don't, employers can attract and keep employees. This is important in industries or locations where it’s hard to find skilled workers or where companies are trying to lure workers away from competing businesses. Some perks make work or life more enjoyable, while others increase income.

Types of employment benefits 

Employee work benefits fall into two categories: mandatory or supplementary. Here’s what you need to know about each.

Mandatory employee benefits in Australia

Sometimes called statutory benefits, mandatory employee benefits are those your employer has a legal obligation to give you, in addition to paying your salary or wages. These are things you’re entitled to as part of your overall compensation: superannuation, worker’s compensation, annual leave, parental leave, and sick leave, etc. Though leave entitlements generally only apply to permanent full-time and part-time employees, casual workers in some industries and states can access sick leave through government schemes such as the Victorian Sick Pay Guarantee.

Superannuation contribution 

On top of your earnings, your employer has to pay the equivalent of 11% of what you’ve made into your nominated superannuation fund. This means for every $100 your employer pays you, they pay an additional $11 into your super fund. Your super fund invests the money (based on the options you select), which accumulates interest, with the aim of it funding your eventual retirement (or your mortgage deposit). 

You can also make voluntary contributions to your super fund on top of what your employer pays into it. Extra payments can be made to your super fund in a number of ways, including:

• Out of your own money
• Through salary-sacrifice contributions
• Contributions by an insurer
• Government co-contributions
• Contributions by your employer that are above their 11% mandatory obligation

Leave and time off 

As a permanent employee, you have access to paid leave and time off. Here are some of the different types of leave employers must legally provide:

• Annual leave: four weeks (20 business days) of annual leave is accrued every one year you work as a full-time employee. This is pro-rata for part-time employees e.g. if you work 19 hours per week (50% of the full-time amount of 38 hours per week), you would be entitled to 50% x 20 = 10 days. Annual leave does not reset at the end of each 12-month period, but continues to accumulate until you use it, or is paid out when you leave that employer.
• Parental leave: employees who are the primary carer of a newborn or newly adopted child are entitled to 12 months of unpaid leave. There are programs that are designed to pay parents while on leave, including the Australian Government Parental Leave Pay and employer-funded parental leave payments. 
• Sick and carers leave: 10 days leave per year for full-time employees if you need to take time off because you are sick, injured or you need to care for someone in your family. As with annual leave, the balance at the end of each year carries over to the next year and continues to accrue.
• Compassionate and bereavement leave: you are entitled to two days of paid compassionate leave each time you meet the criteria (the death of an immediate family member, including pregnancy loss). This type of leave doesn’t accumulate and there is no limit to the amount of times it can be taken. This is unpaid leave for casual employees.   
• Family and domestic violence leave: 10 days leave per 12-month period. This leave can be used if you or a family member experience family or domestic violence, have to attend court or access mental health services as a result of family or domestic violence. This leave does not accumulate from year to year.
• Long-service leave: employees who stay with the same company for 7–10 years earn 6–13 weeks of paid leave, depending on the state and territory they’re in.

Supplementary employee benefits in Australia

Many organisations offer additional employee benefits. These are called supplementary benefits, and are used as incentives to attract and retain staff. Here are a few common examples of supplementary benefits that you might find as part of an employee benefits program in Australia.

Bonuses and incentives 

Cash bonuses and incentives (monetary or otherwise) are used to motivate employees to achieve targets, either individually or as part of a team. Employers use incentives in a variety of ways: to boost individual performance or encourage a high standard of work.

There are different types of bonuses given by employers. Here are some common bonus structures in Australia:

• performance-based bonuses, 
• profit-sharing bonuses, 
• tax incentives, education or expenses subsidies, 
• commission incentives, 
• sign-on bonuses, and 
• spot bonuses. 

Performance-based incentives  

Performance-related incentives are given when you meet individual or team targets. They can be monetary or non-monetary (like gift vouchers, extra time off, hampers or even holidays.) Some common types of performance-based incentives are:

• Incremental salary raises (usually straight after a performance review)
• Stock options 
• Gifts

Employee stock options  

Stock options give you the option to purchase a set amount of company stock at a pre-set price. Owning stock in a company means that when the company does well and its share price increases you can make a profit if you sell your shares (conversely, if the company does poorly and the share price drops, the value of your stock will also go down.) Companies offer stock options so that employees feel invested in the company’s success and are therefore more motivated to perform well. Some employers offer stock options when they first extend a job offer, to supplement the salary amount, as it requires less financial outlay. 

Health and wellness benefits  

Health and wellness perks can make employees happier, more productive, and less likely to require sick leave – which has benefits for employers as well. Here are some types of health and wellness perks employers offer:

• Health insurance. Some employers offer health insurance benefits for employees – they pay for your private health insurance policy either in full or in part. Usually you can choose your preferred policy from a selection, and sometimes it includes family cover.
• Mental health benefits for workers. Some companies offer paid mental health days (or extra sick leave), and have an Employee Assistance Program that provides access to free counselling. These programs are confidential and often external to the company or organisation.
• Dental health benefits. It’s not that common in Australia, but some companies might offer a corporate dental program or dental insurance to employees. 
• Work-life balance benefits. Work-life balance includes flexible working conditions, WFH arrangements, extra leave, early Fridays, regular rostered days off, birthday leave and remote-work programs where you can do your job from anywhere. 
• Gym memberships and wellness/fitness benefits and discounts. Some companies offer gym memberships or discounts/memberships for classes like yoga or Pilates. Other examples include subscriptions to mindfulness and wellness apps, on-site bicycle storage and end-of-trip facilities, lunchtime yoga or meditation, and offsite leisure trips. 
• Wellness programs. In-office wellness programs can include things like massage days (where you can book 10–15 min free shoulder massages), quit-smoking programs, health screenings and healthy food/nutrition programs.

Learning and development benefits  

Many companies provide further education and training to employees, offering courses through registered trade organisations (RTOs), universities or TAFE. Investing in employee education means the company benefits from qualified and knowledgeable staff, while workers benefit from having more skills and certifications. A lot of workplaces also offer in-house training to further your learning and development, such as workshops, seminars, or online courses tailored to the company’s specific needs and goals. 

Work from home and remote job benefits  

Employers that offer work-from-home jobs and hybrid roles usually provide a one-off allowance for setting up a home office. The amount of the allowance can vary, depending on the company, and can range from a few hundred to a few thousand dollars. For many workers, the flexibility to work from home in a fully remote job is an attractive employee benefit because of the work-life balance it allows.

Unique perks and experiences 

Some other unique perks and experiences workplaces offer employees include:

• Free breakfast and/or lunch in the office
• A well-stocked snack pantry
• Entertainment rooms with games and activities
• Employee discounts and swag
• Nap rooms
• Standing desks
• Regular catered events
• Annual staff parties
• Employee retreats
• Barista coffee
• Fun workshops and leisure activities

Employee benefits include things like mandatory superannuation contributions and paid leave, as well as ‘supplementary’ benefits like bonuses, healthcare and flexible working conditions. By offering benefits, companies can attract good and keep good talent – if you’re job hunting, it’s always good to check your potential employee benefits before accepting an offer. 

FAQs 

What are the most common types of employee benefits offered? 

The most common types of employee benefits are mandatory and supplementary; here are some examples of each:

• Mandatory benefits: superannuation, annual leave, sick and carer’s leave, parental leave, compassionate and bereavement leave, family and domestic violence leave, long-service leave, and workers compensation.
• Supplementary benefits: bonuses and incentives, training and development courses, mental health programs, petrol allowance, company car, company phone, flexible hours, gym membership, childcare discounts, private health insurance, meals, WFH days, and employee discounts.

How to negotiate better employee benefits?  

To negotiate better employee benefits:

• Research industry standards to get an accurate benchmark 
• Speak with your HR department or manager 
• Agree on benefits before signing or re-signing your contract
• Consider accepting a lower base salary in exchange for benefits like remote work, higher commission, or a guaranteed annual bonus

What are employee benefits and why are they important?  

Employee benefits are any extras you get in addition to your usual pay. Many employers offer additional perks to attract and retain talented employees. Employee benefits help enhance job satisfaction and overall employee well-being, and can result in increased productivity and lower employee turnover.

What are the employee benefits in Australia

In Australia statutory employee benefits that all workers are eligible for include: 

• Annual leave
• Parental leave
• Sick and carer’s leave
• Compassionate and bereavement leave
• Family and domestic violence leave
• Long service leave
• Worker’s compensation

What benefits are most important to employees? 

Which benefits are most important depends on the individual person. Some of the most popular benefits include extra annual leave, flexible work arrangements, a company car, a bonus, and opportunities for training and education.

Which company has the best employee benefits? 

Some companies known for offering attractive benefits include tech leaders like Alphabet, Amazon, Netflix and Meta. The Australian government sector also offers good employee benefits, offering stability, above-average superannuation contributions, and competitive salaries. Small businesses might also offer good benefits, like employee discounts, in-office perks and extra leave.