What is a company benefit package? A Complete Guide for 2025

What Is a Company Benefits Package?

In 2025, a company benefits package is more than a privilege; it's a need of the time. It is a package of perks, non-wage compensations, and fringe benefits provided by the companies in lieu of employment. Around 15 years ago, company benefit packages were a luxury. Now it's a strategic investment in human resources.

Why Company Benefits Packages Matter

Attracting Top Talent

Employees with talent, especially Gen Z and Millennials, are comparing the entire compensation ecosystem, not just salary. Company benefits packages are increasingly becoming a significant factor in candidates' decisions to join a company.

Employee Retention

Hiring new employees is a tedious and costly affair. A strong company benefits package can ensure loyalty and long-term commitment. When employees feel valued, seen, and appreciated, they are more likely to stay.

Enhancing Productivity

The company benefits package provides a sense of wellness and luxury. It acts as a firewall for the human brain. It hinders personal stress from entering the professional workspace. It's a strategy that says, “We will look after everything; you focus on your job.” By doing so, it enhances productivity.

Financial Security

One of the pros of the desired benefit package is financial security. It can cover hospital expenses, a retirement plan, or financial management. Organisations are prioritising the concerns of employees to ensure long-term stability for everyone in the company. Acknowledging the benefits, the employees are more committed towards their work and the organisation.

Refining Company Culture

Investing in company benefits packages is not a one-time activity. It's an ongoing process to provide the best to those people who left their dreams to fulfil the organisation’s goals and ambitions. A medical emergency handled, financials looked after, and access to paid courses, among other benefits, can make an employee feel lucky to be part of the organisation. It creates a brand value like no other.

Exciting and Irresistible Company Benefits Package

Generally, packages vary by industry, company size, and location; a comprehensive corporate benefits package typically includes:

Health Insurance

A modern and comprehensive health insurance plan incorporates medical, dental, and vision coverage. It sometimes includes families and dependants. It generally covers maternity, daycare, and pre- and post-hospitalisation costs, along with a specific amount of cash per day of hospitalisation.

Paid Time Off

Paid time off is the most famous one. It incorporates sick leave, casual leave, and vacation time.

Bonus and Performance Incentives

Bonuses and performance incentives are tied to professional and corporate goals. It is designed to reward employees for performance above expectations. It also acts as a motivator to do your best for the organisation.

Flexible Work Arrangements

Companies are providing flexible work arrangements. It can be work from home, hybrid, or compressed workweeks. In a compressed workweek, employees work for designated hours a week.

Parental Leave

Parental leave includes paid maternal and paternal leave.

In India, the Maternity Benefit Act, 1961, provides for paid maternity leave for eligible women. The current duration is 26 weeks (6.5 months) for the first two children and 12 weeks (3 months) for the third and subsequent children. This leave can be taken before and after delivery, with a maximum of 8 weeks before the expected delivery date for the first two children.

Paternity leave in India, for central government employees, is regulated by the Central Civil Services (Leave) Rule 551 (A). This rule grants 15 days of paid paternity leave to male employees with fewer than two surviving children. Leave can be taken before or within six months of childbirth or adoption. While this policy is mandated for government employees, private companies in India are not legally obligated to provide paternity leave, but many offer it as part of their benefits packages, often ranging from 15 days to several weeks.

Mental Health and Wellness Support

In the debate over whether to adopt a 70-hour or a 40-hour workweek, employees experienced a decline in their mental health. The outcome was low productivity, less engagement, and burnout. Recently, companies have been focusing on mental well-being by introducing Mental Health Day as a paid leave and arranging and supporting counselling sessions. They are also providing free access to mental health camps and counselling to convey, “We care.”

Learning and Development

Employees are choosing organisations that focus on learning and development. Access to paid courses, training, and tuition reimbursements is gaining attention. This benefit helps them to grow and stay relevant to the market.

Miscellaneous Benefits

There are some more popular and common benefits like leave travel allowance, uniform allowance, retirement benefits (PF, NPS, etc.), childcare, sabbaticals for studies, personal reasons, etc, ESOPs, children's education allowance, meal vouchers, fuel vouchers, phone and internet reimbursements, BYOD, driver's salary, books, and periodicals.

Our Employee Benefits Suite

Our Employee Benefits Suite offers a range of benefits like meals, rewards, fuel, telecom, office wear, books and periodicals, and LTA, along with the new-age benefits like health and wellness, learning and development, and gadgets and equipment. Our 2-in-1 hybrid card is accepted across all Rupay merchants. Our Pluxee India app is India's highest-rated employee benefits app. It manages cards on the go. Empower your employees with the most comprehensive benefits suite.

Most Sought-After Benefits in 2025

Work-from-anywhere policies, AI tools for productivity enhancement, financial planning and support, and customised benefit portals are some of the most sought-after benefits in 2025. Modern companies are introducing unique perks, such as pet insurance and "treat yourself" stipends.

Tax Benefit on Company Benefits Packages

Tax benefits in corporate benefits packages matter because they increase take-home salary, reduce overall tax liability, encourage better planning for retirement benefits, and allow employees to enjoy perks without paying extra taxes.

Common tax-free or marginally taxable benefits are health insurance premiums, meal coupons (up to Rs 50/meal), leave travel allowance, and employer contribution on PF (tax-free up to 12%). ESOPs, cash/spot bonuses, performance bonuses, etc, are some taxable perks.

Final Note

Don't wait for your competitor to provide a unique company benefits package. Be innovative. Be a leader, invest in corporate benefits packages, and see yourself grow.