A 2025 Guide to Employee Benefits

Whether you're starting a new job or assessing your options at a current one, it’s important to understand the benefits your employer offers. Employee benefits can make a big difference in your experience at work and your quality of life.

Let’s take a look at some of the most common types of employee benefits and examine how they work, so you can decide which ones may be best suited for you.

What are employee benefits? 

Employee benefits are perks and types of compensation your employer provides on top of your wages. These benefits can include health, dental, and vision insurance, along with paid time off (PTO). But they can also include supplemental insurance coverage, retirement plans, bonuses, stock options, and more.

The benefits you’re offered can vary based on the company, whether you’re a full-time, part-time, or contract employee, as well as government requirements.

How do employee benefits work? 

If you’re a new employee who was offered a benefits package, some of these benefits — like health insurance — may be available from your first day on the job or within a few weeks. The exact date your benefits begin can vary, so be sure to check with your employer’s human resources department.

If you’re an existing employee who wants to make changes to your current benefits, you'll typically need to wait for the designated open enrollment period or experience a qualifying life event (QLE). Open enrollment for employees typically happens once a year. But a QLE — a significant change in a person’s life, such as marriage or the birth of a child — can occur any time of the year.

What's the importance of employee benefits?

According to MetLife's 2024 Employee Benefit Trends Study, a robust benefits package plays an important role in the overall employee experience and job satisfaction. When companies offer employee benefits, they can also help improve employee engagement and productivity. Employee benefits are important to consider — especially when evaluating a job offer — because they can help provide: 

• Financial security: Benefits like retirement plans, health insurance, disability insurance, and life insurance can help provide financial safeguards and assistance. They can help you plan for the future, protect your family, and prepare for unexpected expenses.
• Improved health and well-being: Certain employee benefits programs focus on improving your health and well-being. For instance, wellness programs, gym membership reimbursements, and access to mental health resources can help you manage stress and prevent burnout.
• Professional growth and development: Access to professional development and growth opportunities  — such as mentorship programs, training sessions, and tuition reimbursement opportunities — can help you enhance your skills and grow your career.

Types of employee benefits

The most common types of benefits typically include time off, financial, and insurance benefits for employees, such as:¹

• Health-related benefits (medical, dental, and vision)
• Retirement accounts (IRA, Roth IRA, 401K, etc.)
• Time off and leave benefits (PTO, paid holidays, parental/caregiver leave, bereavement leave)
• Life insurance
• Disability insurance

It can also be common to have different types of supplemental insurance benefits offered in your employee benefits package. These may include everything from accident insurance to critical illness insurance. They may also be referred to as voluntary benefits, and they're designed to help provide a financial safety net to employees. 

Health-related benefits

Many employers offer health insurance — including medical, dental, and vision plans that help manage the cost of health and wellness care. Medical insurance could include coverage for physician well or sick visits, hospital stays and preventive care. Dental benefits may cover all or partial costs for routine care like dental checkups and teeth cleanings as well as more extensive procedures such as treating cavities or a root canal. Vision insurance offers benefits that may cover eye exams, eyeglasses, contacts and more. 

Retirement accounts

Some employers offer retirement plans, such as 401(k), 403(b), and pension plans.² These plans help you save for retirement with pre-tax or post-tax contributions. Employers may match a percentage of your contributions, which can provide a boost to your retirement savings over time.²

Time off and leave benefits

Paid time off (PTO) is a common benefit typically used for sick leave, vacation days, and personal days, depending on your employer’s policy.³ Additional leave benefits may include PTO for recognized public holidays, leave for new parents and other caregivers, and bereavement leave if you’ve experienced the loss of a loved one.³

Life insurance

Life insurance helps provide financial assistance to a beneficiary in the event of the policyholder’s death. It’s designed to provide monetary support and protection to help secure a beneficiary’s or loved one’s financial future. Life insurance can help a beneficiary handle expenses like mortgage or rent payments, food, utilities, and end-of-life costs such as a funeral. Life insurance may also include value-added services — such as estate planning and grief counseling — at little or no additional cost to the policyholder.

Disability insurance

Long-term and short-term disability insurance offer financial support if you’re unable to work due to an illness, injury, or other qualifying disabling event. While you’re unable to work, this benefit pays you a portion of your income that you can use to help meet your financial obligations — such as mortgage payments, rent, other monthly expenses, and more. Depending on the plan, disability insurance may also offer access to personalized support services as you transition back to work.

Additional employee benefits

Employees today often look for more than the basics when it comes to benefits. Depending on the type of benefit, your employer may or may not absorb the full cost. Additional employee benefits can include:⁴

• Well-being perks (mental or physical health services and subscriptions, mental health days, etc.)
• Employee assistance programs (EAPs)
• Child care (reimbursement, in-office child care)
• Flexible work arrangements (remote or hybrid work, four-day workweek, etc.)
• Pet insurance
• Legal insurance
• Supplemental health insurance (accident insurance, cancer insurance, critical illness insurance, or hospital indemnity insurance)
• Health savings and spending accounts (HSA, FSA, DC-FSA, LP-FSA, and commuter benefits)
• Financial wellness programs (retirement planning assistance, student loan repayment programs, budgeting tools, etc.)
• Scholarships and tuition reimbursement
• Bonus programs
• Home office, phone, or internet stipends
• In-office perks (free lunches, office parties, bring-your-pet-to-work events, etc.)
• Diversity and inclusion initiatives (employee resource groups, diversity training programs, mentorship opportunities, etc.)

What are the best employee benefits?

You could say the best employee benefits package is the one that best fits your needs — both current and those you may encounter in the future. If possible, look for companies that support their employees through a well-rounded voluntary benefits offering. Here are some tips to help you as you evaluate your benefits options:

• Assess your personal circumstances: Consider your current circumstances — and think about your and your family’s future needs — to determine which benefits matter to you.
• Evaluate your health and wellness needs: Assess your healthcare needs and those of your family. Consider factors such as ongoing medical conditions, anticipated medical procedures, and prescriptions. Then, choose a benefits plan that aligns with your needs.
• Compare costs: Look closely at the costs associated with different benefit options — such as premiums, deductibles, copayments, and out-of-pocket expenses. Enroll in plans that align with your financial situation.
• Consider how a benefit might alleviate some financial pressures: For instance, a supplemental health insurance policy can provide you with a lump sum payment in the event of a qualifying accident or illness. That money could then help cover medical expenses or go toward your daily bills.