Types of employee benefits: 12 benefits HR should know

23 May 2025

As an HR professional, you are aware that recruiting and retaining employees requires more than just giving them competitive pay. Employees desire companies that care about their overall health, financial security, and career development. An effective employee benefits package can make your company the one to look up to, increase job satisfaction, and engage employees.

Employee benefits in India have transformed significantly. From regulatory requirements to contemporary benefits that promote wellness, organisations need to be cutting-edge by providing benefits that count. Let us take a closer look at 12 must-have employee benefits in India that every HR manager should know.

Key takeaways

A strong benefits package is essential for attracting and retaining top talent. It not only contributes to employee satisfaction but also enhances business success.
Employee benefits extend beyond just salary. Key categories include health and wellness, financial security, work-life balance, and career development.
Health insurance, retirement plans, PTO, flexible work options, and wellness programmes are among the top benefits every HR professional should prioritise.
Pluxee provides a comprehensive digital platform that helps businesses streamline and manage employee benefits with ease. It offers customized benefits solutions that can boost employee engagement and satisfaction.
Studies show that companies with great benefits packages experience higher employee retention rates. Investing in employee well-being can lead to a happier, more productive workforce.
Employee benefits are evolving rapidly. HR professionals must continuously review and adapt benefits packages to meet the needs of a diverse, modern workforce.

How can employee benefits affect retention and engagement?

A good benefits package enhances an employer's reputation, reduces turnover, and increases job satisfaction. Studies prove that companies that have great benefits retain employees more effectively and run more efficiently. Employee benefits in India are moving beyond basic benefits; next-generation organisations are investing in value-added packages that address physical, emotional, and fiscal well-being.

Understanding employee benefits in India

Employee benefits in India have moved away from conventional to offer full-fledged services that enhance financial security, health, work-life balance, and career development. Organisations that focus on such benefits are better equipped to attract the best talent in today's competitive job market.

1. Health insurance

One of the most popular employee fringe benefits, health insurance, offers financial protection to employees and their dependents in the event of medical emergencies. Several Indian organisations provide group health insurance policies covering hospitalisation, critical diseases, and maternity charges. Employers can add value to this benefit by incorporating mental health care, telemedicine services, and wellness programmes.

2. Retirement benefits

Retirement planning is crucial to secure a financial future. In India, the Employee Provident Fund (EPF) is a mandatory benefit where employers and employees contribute to a corpus at the time of retirement. Besides this, companies offer the National Pension System (NPS) or superannuation benefits to help employees build a financially secure future. Some firms also offer gratuity as a function of tenure.

3. Paid Time Off (PTO)

An accurately worded paid leave policy matters for employee happiness. Standard PTO policies in India include earned leave, sick leave, casual leave, and public holidays. Other leave benefits such as paid parental leave, bereavement leave, and mental health days, are also being offered by the majority of firms to make the employees feel good.

4. Flexible work arrangements

The COVID-19 pandemic reshaped work culture, and flexibility emerged as a much-needed benefit. Organisations that provide telecommuting, flexible work options, or adjustable hours create a more diverse work environment. This kind of benefit is really useful for employees attempting to balance their private and professional lives, ultimately leading to increased productivity and job satisfaction.

5. Performance-based bonuses

Performance-linked incentives (PLIs) or bonuses motivate workers to do a better job in their workplace. These bonuses may be annual, quarterly, or project-based, depending on corporate policy. Incentive programmes such as profit-sharing, stock options, or commission-based payments further enhance the motivation and loyalty of employees.

You can read more about it on Cash Bonuses Vs. Rewards For Employees: Which Is Better ?

6. Workplace wellness programmes

Wellness programmes for employees, such as membership in a gym, yoga, counselling, and medical check-ups, are also catching up as attractive employee benefits in India. Organisations that offer well-being benefits have better employee engagement and fewer absences. Corporate wellness retreats and stress management sessions are just some of the ways through which this programme can be boosted.

7. Training and development

Continuing training opportunities allow employees to improve their skills and career development. Organisations invest in employee training by conducting seminars, webinars, certifications, and leadership courses. Education benefits and tuition reimbursement also allow workers to enhance their skills so they can work effectively for the organisation.

Did you know?

Based on recent data, a large majority of workers (approximately 75%) report that they are more likely to remain with an employer because of a good benefits programme.

8. Employee Stock Ownership Plans (ESOPs)

ESOPs allow employees to get a stake in the company by providing them with company shares. This aligns the employees' interests with the company's performance and creates a feeling of ownership and responsibility. ESOPs are offered by all large firms and startups in India as a long-term retention strategy.

9. Childcare and parental support

Work-life balance becomes an issue for employees. Organisations providing childcare support, crèche facilities, and longer maternity/paternity leave demonstrate a specific concern for the welfare of employees. Indian companies with more than 50 employees are required to provide crèche facilities according to the Maternity Benefit (Amendment) Act in India.

10. Commuter benefits

Transport allowances, shuttle facilities, or fuel allowances can be the magic bullet for relieving the stress of day-to-day journey stress for staff. Commuting passes through public transport or ride-sharing subsidies are provided by some companies to reduce commuting costs and support work-life balance. Pluxee offers fuel cards as a convenient solution to help employees manage commuting expenses effectively. You can read more about it on What are fuel cards and how do they work? | Pluxee (Sodexo)

11. Meal benefits

Employees enjoy convenient and nutritious meal options, with companies offering on-site cafeterias, meal vouchers, or meal delivery services. These meal benefits not only support employee well-being but also promote a positive work culture. Free meals, catered lunches, and team meals further enhance employee satisfaction and contribute to a more enjoyable work environment.

12. Financial wellness benefits

Providing financial wellness initiatives such as salary advances, low-cost loans, and money management helps employees control their finances better. A few Indian organisations have money management training that educates employees about savings, investing, and tax saving. Organisations are rolling out early wage access programmes to help employees avoid money issues.

Did you know?

Approximately 70% of workers are more likely to remain loyal to an employer with decent benefits, which underscores the huge effect of a quality benefits package on retention levels.

How can Pluxee help?

Managing and applying employee benefits appropriately is intimidating, but with the right platform, these can be beneficial for the organisation. Pluxee provides employee benefit solutions with total integration, managing the evolving demands of today's workplace. Online meal benefits, wellness solutions, gift card rewards, or personal finance benefits. Pluxee helps employers achieve better employee satisfaction and morale. By offering flexible and customised benefits, Pluxee enables employees to enjoy benefits that actually count, hence making it simple for organisations to recruit and retain employees.

End note

For HR professionals, an effective benefits package is the best way to retain and acquire talent. By offering medical coverage, pension benefits, wellness programmes, and cash incentives, organisations can cultivate a positive workplace culture. With the needs of employees continuing to increase, HR departments should be keen on trends in the industry and customize benefits accordingly to meet workforce needs effectively.

An effective benefits package, in turn, not only supports employee morale but also enhances overall business success. Indian companies that make investments in worker benefits will have a competitive advantage when it comes to attracting and retaining top talent. HR departments need to continuously evaluate and fine-tune their benefits strategy to meet changing workforce expectations and industry best practices.