What are small business employee benefits packages in Canada?

Employee benefits packages are typically extra compensation or perks beyond basic wages, viewed by some organizations as intangible assets defining corporate culture and influencing business success. While others may see benefits as HR and administrative challenges, a strategic approach can transform them into powerful recruitment, engagement, and retention tools. These plans can help your employees cover expenses not paid for by provincial or territorial healthcare plans. Your company can cover healthcare costs fully or partially, with variations based on employment status and payment structure, for example, full time or part time and hourly, commission, or salaried.

Small businesses might consider offering creative and meaningful benefits, such as coverage for home office setup, annual learning grants, and subscriptions to mental health and fitness apps.

Why are benefits packages important for small businesses?

Benefits can empower your small businesses, especially as you expand and compete for top talent. Offering flexible rewards can keep your company competitive as employees look for options that meet their needs. Benefits packages can help recruit and enhance employee productivity, engagement, retention, and financial security while enhancing your organization’s reputation. Training your workforce, using consistent communication, and offering support to understand the available services can maximize your benefits plans.

Mandatory benefits for small businesses

Some benefits are mandatory for employers. Below is a list of benefits that Canadian Government agencies closely regulate:

• Workers Compensation Insurance (WCI): WCI operates at the provincial and territorial level to protect employees and employers if a workplace accident or illness occurs. It typically covers the cost of rehabilitation and medical care and a percentage of lost income due to disability. The minor children and spouses of employees who have fatal work-related accidents may also receive a monetary benefit. Failing to register for this benefit can result in heavy penalties.
• Canada Pension Plan (CCP): Canadian employers (except in Quebec) deduct CPP from employees 18 years and older at 5.95% of gross earnings through automatic payroll deductions as part of a joint retirement program. The employer matches the contributions until they reach a pre-set cap.
• Employment Insurance (EI): Employers deduct EI from employees in most scenarios at 1.66% of the worker’s gross earnings to a pre-set maximum for the year. The employer contributes an additional 1.4 times the amount contributed by the employee.
• Legislated leaves: These included statutory holidays and leaves such as vacation, sick, and parental leave.

Types of benefits packages

Employers often default to just health benefits, but they might consider providing a wider range of perks to appeal to the new generation of workers. Below is a list of optional benefits:

Health-related

Healthcare coverage in Canada typically includes basic medical care under provincial or territorial health plans. These plans may not cover dental, massage, optometry, or physiotherapy services. Employees often incur out-of-pocket expenses for these services, adding to significant annual costs. By providing a workplace healthcare plan, you can lessen your employees’ expenses while reducing their absences due to sick leave, contributing to higher productivity. Some examples of health-related benefits coverage can include:

• Paramedical services: These benefits include physiotherapy, chiropractic care, audiology, mental health therapy, podiatry, massage therapy, psychology, speech therapy, and social work.
• Vision: Eyesight issues can affect your employees’ performance, impacting productivity. Offering a vision plan with comprehensive eye exams, including diabetic exams and an allowance for glasses, contact lenses, and laser surgery, can benefit you and your employees. Ask your provider for package options to make this coverage more accessible and affordable.
• Dental: Routine dental exams can improve your employees’ oral health, keeping them pain-free and smiling. Coverage may include X-rays, cleanings, fluoride treatments, fillings, dentures, bridgework, crowns, retainers, and braces. Dentists treat tooth decay and periodontal and gum disease and can be the first to detect chronic health problems like heart disease, diabetes, and issues with bones and digestion.
• Prescription drug coverage: Medication can be expensive, especially daily medication. Some people may not fill their prescriptions because of cost. You can maintain a healthy workforce by offering this coverage in your benefits package.
• Life insurance: Employers can provide employees and their dependants peace of mind by enrolling in a group life insurance policy. The beneficiary receives a predetermined lump sum if an employee passes away, and the family can use these funds to pay outstanding debts and funeral costs.
• Critical illness insurance: This benefit can help reduce the financial burden of dealing with a severe illness. The insurance pays a lump sum for life-altering diagnoses covered under the policy.
• Accident insurance: This policy pays the beneficiary a lump sum following an accidental death or a catastrophic injury.
• Disability benefits: Employees may face disabilities that prevent them from working. You can support them and your business during such circumstances with two types of plans: short-term disability (STD) and long-term disability (LTD).
• Travel emergency medical care: This benefit offers your employees access to a global support network if they have a medical emergency while travelling. Regardless of whether it’s locating a nearby hospital or a medical evacuation, this service can help them through stressful times in unfamiliar territory.

Financial benefits

Employees experiencing financial concerns may be less engaged at work. Employers can enhance productivity and alleviate stress by offering the following financial benefits:

• Compensation: Employees unhappy with their wages may look for opportunities elsewhere. You can prevent turnover by implementing strategies such as annual salary and hourly pay increases by a fixed percentage. Rewarding your employees based on their performance with taxable benefits, like profit sharing or cash bonuses, is an alternative.
• Tuition assistance: You can develop a tuition reimbursement or assistance program to help pay for part or all of the course enrolment for continued education.
• Financial wellness programs: Some employees live pay check to pay check to cover expenses and may face legitimate worries about meeting monthly financial obligations. After paying bills, they may have limited resources for long-term goals, such as saving for a child’s education or retirement. Financial education and counselling services can empower your employees to make informed financial decisions, manage debt effectively, and prioritize savings for the future.
• Retirement savings plan: You can help your workforce build retirement savings by providing access to an RRSP (Registered Retirement Savings Plan). Besides enhancing financial security and reducing employee stress, retirement plans can strengthen recruitment and retention.

Work-life balance

A healthy work-life balance can strengthen productivity and keep your employees happy. The following perks can encourage a balance between your employees’ work and personal lives:

• Paid time off: Employers can provide paid time off through banked hours, including planned time off, personal time off, and sick leave. Employees can typically use these hours to cover vacation, mental health, and personal days.
• Flexible work location: Where employees work can impact their performance and your recruiting strategies. Whether remotely, in a hybrid model, or at your company’s physical location, you can decide how flexible you want to be with where your employees work.
• Mental health benefits: This benefit can cover online self-help subscriptions, personalized therapy to fit an employee’s needs, and other mental health resources.

Unique benefits

Offering benefits beyond the standard medical coverage can help incentivize and attract and retain top talent. Staying up to date with workplace trends and anticipating evolving needs can lead to unique benefits, such as:

• Employee assistance programs (EAP): EAPs can support employees and their immediate family members dealing with various personal issues, including mental health, work-life balance, substance abuse, and identity theft. Despite the valuable resources available, employees may hesitate to use these services due to the sensitive nature of the topics. You can encourage participation by reinforcing the confidentiality of EAPs and highlighting their benefits.
• Pet insurance: You likely have pet-enthusiastic employees who understand pet ownership’s financial and emotional responsibilities. Offering this insurance as an optional benefit can help with associated expenses like vaccinations, routine wellness care, and addressing injuries, chronic conditions, and necessary surgeries.