20 affordable benefits to offer

Attracting and retaining employees. Without skilled workers, your organization can't compete. Employers must improve employee engagement and enhance their company’s culture to entice qualified job candidates.

Employees want meaningful benefits. But, for many employers, budget constraints can make it challenging to provide these perks. Adding free and low-cost employee perks can incentivize your staff to stay at your company. To help get you started, we’ll go over 20 affordable benefits ideas you can offer to your employees—regardless of your budget.

In this blog post, you’ll learn:

• Twenty free and low-cost employee benefits that can enhance your company's compensation package.
• How affordable perks can boost employee satisfaction, increase productivity, and improve retention.
• Insights into the most valued employee perks and explore cost-effective ways to offer health benefits.

What are free employee benefits and perks?

Free employee benefits are perks that don't directly cost you or your employees anything. This differs from low-cost benefits, which are generally inexpensive to provide to your workforce compared to traditional benefits.

You shouldn’t rely on free and low-cost benefits alone. However, providing free benefits and perks is often simple and can help you bolster an existing compensation package. As a result, you’ll be able to attract more talented workers and keep your retention rate high.

Why are affordable benefits good for retention?

Providing a variety of free and low-cost perks is a great way to improve job satisfaction, increase productivity, and boost employee morale. They can also give your company an edge in a competitive job market. Let’s go over these advantages in greater detail below.

Increase employee satisfaction and morale

Offering various benefits is one of the best ways to retain workers because employees value activities and other perks. When your staff sees your organization as a fun workplace where leadership cares, they'll be more likely to promote you as an employer of choice.

According to a Gallup survey, 30% of workers said if their employer offered extra benefits, they may not have quit their jobs¹. Without a variety of benefits, your employees will seek other opportunities elsewhere.

As a small or medium-sized business, you may be unable to expand your employee benefits package due to budget constraints. Offering free or low-cost benefits can help compensate for these missing perks, improving job satisfaction.

Increase productivity

Employees who feel cared for and appreciated are likelier to work harder and stay motivated. Additionally, satisfied employees are more willing to contribute ideas supporting the company’s initiatives and mission. If you offer the right benefits and engagement opportunities, your staff can help your organization grow and reach its goals.

Benefits create a competitive advantage

Crafting a comprehensive benefits package gives your business a significant advantage. By offering the perks your employees want, you'll have a better chance of enticing top-notch job seekers.

Our 2024 Employee Benefits Survey found that 81% of employees said a company’s benefits package is a key consideration in whether they accept a position. If you highlight additional low-cost perks in your job listing, your post has a better chance of standing out.

Free and low-cost employee benefits ideas

Now, let's look at some of the top free and affordable perks you can offer your employees.

1. Employee discounts

If your organization sells consumer goods or services, consider offering employee discounts on certain items. This can help your workers save money, which is a huge perk for them and their families. It also enables you to attract new employees who love your products.

The IRS allows you to give employees a 20% tax-free discount for services you offer customers². You can also provide a discount on merchandise up to your gross profit percentage multiplied by the price you charge non-employees. You can’t offer tax-free discounts for real property, investments, or items not available to customers.

2. Event tickets

Event tickets can be expensive depending on the occasion. So, providing free tickets to your employees is a great way to create excitement and engagement. To launch this program, you can hold a drawing for free tickets where employees earn entries to the contest. This can be a fun way to reward employees who go above and beyond.

3. Potlucks and team lunches

One of the best ways to enhance workplace culture is by allowing employees to socialize about something other than work. Team lunches and office potlucks are excellent ways to accomplish this sense of belonging. You can schedule potlucks on a specific day, like once each month on a Friday, or have specific themes, like breakfast.

If you’re celebrating a business accomplishment, you can take your team out for lunch or dinner. This improves engagement and allows your staff to connect outside of work.

4. Bring your pet to work

Many organizations allow employees to bring their pets to work on certain days or year-round to make the workplace more enjoyable. If you plan on offering this perk, ask your staff beforehand if they’re comfortable with the idea, as some may have allergies to certain animals.

5. Summer Fridays

When the weather is nice, you can offer summer Fridays to your employees. This allows them to leave work early to get out and enjoy the warm weather before the weekend. Some organizations take this further by giving their staff Fridays off in the summer.

6. Remote work

Many organizations have kept the remote work model they adopted during the COVID-19 pandemic. This is because employees value work-life balance and flexibility more than ever.

Having remote work options or using a hybrid model improves morale and retention. A Stanford study found that resignations fell by 33% among workers who switched from working in-office full-time to a hybrid schedule³.

Working from home also eliminates commute times, saving your employees money on gas, vehicle maintenance, transit passes, and, most importantly, time.

7. Flexible work schedules

Flexible work arrangements allow employees to choose their work hours as long as they finish their work on time. Many organizations still require employees to work their full 40 hours. But their daily schedule is up to them. This allows employees to include travel time, taking kids to school or daycare, dentist or doctor appointments, and other life circumstances into their day.

Flex schedules also help you attract job seekers, especially Gen Zers and Millennials. According to a 2024 Deloitte survey, 19% of Gen Zs and Millennials chose their current employer because they offered flexible hours or a reduced work week⁴.

8. Casual dress code

Allowing your staff to wear casual clothes is another great perk for attracting job applicants. Not everyone wants to dress up or buy new clothes to start working at a new company. Casual dress codes allow workers to be their authentic selves, contributing to belonging in the workplace.

9. Unlimited PTO

Paid time off (PTO) is an essential benefit for recruitment and retention. Without PTO, you may notice increased burnout, which can reduce employee productivity. By giving your employees a chance to rest, they can continue to work at full capacity.

Offering unlimited PTO is especially attractive to today’s workforce. Unlimited PTO allows employees to take as much time off as they like without accruing it. Most organizations put a cap on their unlimited PTO. But even so, it’s typically more generous than traditional vacation time and sick leave.

10. Trivia night

Another fun activity that can promote a positive company culture is trivia nights. Many restaurants and other locations host trivia events, where you and your employees can get together to test your knowledge and win prizes.

You can also host your own trivia session. Many vendors can facilitate a virtual trivia night or other fun activities to encourage engagement if you have a remote workforce.

11. Shorter workweeks

If you want to take work-life balance one step further, you can eliminate the standard 40-hour workweek. More employers are implementing four-day workweeks, where employees work reduced hours but keep their regular salary. According to the American Psychological Association, about 22% of employees in 2024 work at a company that offers a four-day workweek. This is an increase from 14% in 2022⁵.

If you don’t want to reduce your employees' hours, try a 9/80 work schedule. With this schedule, employees work their full 80 hours during a two-week period, but they do so in nine days instead of the usual ten. This gives employees an extra day off every other week.

12. Yoga classes, meditation classes, and other group activities

Another fun perk to offer is regular group activities. This can include yoga classes, meditation sessions, and other activities for 30 minutes to an hour each week. These activities allow your staff to destress, helping them remain happy and productive throughout the day.

13. Employee achievement awards

Recognizing employee achievements is an essential part of employee retention. While providing feedback and celebrating accomplishments in small ways is often enough, some organizations invest in achievement awards. This allows you to formally recognize your employees' contributions in a fun way.

Achievement awards include providing gift certificates to top employees and holding award ceremonies, among other prize options.

14. Occasional meal money and gift cards

Another inexpensive way to retain employees is to provide occasional gift cards or meal reimbursements. These could be for special occasions only, such as birthdays. Another example is for all employees to enjoy once a quarter.

One thing to note is that while the IRS generally considers meal reimbursement a de minimis fringe benefit, gift cards are always taxable income. You'll have to withhold employment taxes on the value of the gift card.

15. Food and beverages

Who doesn't like free food? Giving your workers access to coffee, tea, and healthy snacks is a great way to make employees feel welcome and appreciated.

You can also supply a workplace microwave, electric kettle, coffeemaker, and utensils in your break room to facilitate team lunches and snack breaks.

16. Birthday and anniversary celebrations

Celebrating your team’s birthdays and work anniversaries is another way to promote belonging in the workplace. You can provide cake or ice cream or simply recognize them publicly, such as in your company meetings. Some organizations also choose to give employees gifts for their birthdays or anniversaries.

When honoring birthdays, it's vital to ask each employee how they feel about having their birthday celebrated at work. Some may not want their birthday celebrated in the workplace for one reason or another.

17. Volunteer days

Offering PTO for volunteering is a great way to create a positive work environment and help your staff contribute to their community. If you’re in the office, you can have volunteer days where your entire organization volunteers in the local community, hosts fundraisers, or sets up clothing or food drives.

18. Provide opportunities for growth

Demonstrate a commitment to your employees and willingness to invest in their future. You can provide growth opportunities for your workers through mentorship programs and clearly defined career paths within your organization.

A development program can reduce skill shortages and positively impact employee turnover rates. According to Zippia, approximately 45% of employees would be likelier to stay with a company that invested in their learning and development⁶.

19. Employee stipends

Employee stipends are a cost-effective way to enhance and enrich your compensation package with meaningful lifestyle benefits.

With employee stipends, you can offer a custom monthly allowance for expenses of your choosing. For example, with a wellness stipend, you can give your employees money for wellness services like gym memberships, yoga classes, and home exercise equipment.

This gives your employees more freedom to use their benefits on the needs and activities of their choice rather than forcing them into a one-size-fits-all benefits program.

With stipends, you can offer allowances for a wide range of categories, including, but not limited to:

• Health and wellness
  • Wellness apps
  • Mental health benefits
  • Dental and vision coverage premiums
• Remote work
  • Personal cell phone reimbursement
  • Home office set-up costs
  • Internet access
• Education expenses
  • Tuition reimbursement
  • Conferences
  • Online courses
• Professional career development
  • Workshops
  • Certifications
  • Membership fees for professional organizations
• Commuter benefits
  • Transit passes
  • Parking
  • Rideshare services
• Family expenses
  • Childcare and senior care
  • Fertility treatment
  • Pet care
• Meal allowances
  • Groceries
  • Takeout
  • Meal delivery services
• Entertainment and leisure
  • Reimbursement for fun activities
  • Books, music, or streaming service reimbursement

While most employee stipends are taxable, some are tax-advantaged. You also have complete control over your budget by setting maximum allowance amounts. This enables you to provide affordable benefits no matter your business size or budget.

Affordable health benefits you can add to your compensation package

Free and low-cost benefits are a great first step toward enhancing your benefits package. But, they may be enough to attract and retain the employees you want at your company.

Our 2024 Employee Benefits Survey asked employees about the benefits they value most.

The most valued benefits to employees include:

1. Health benefits
2. Dental insurance
3. Paid time off
4. Retirement benefits
5. Vision insurance

While offering these essential benefits can be expensive, there are ways to keep your costs low.

Health benefits are the most in-demand employee perk. Depending on your organization’s size, the federal government may also require you to offer them. The Affordable Care Act’s employer mandate requires organizations with 50 or more full-time equivalent employees (FTEs) to offer an affordable health benefit that provides minimum essential coverage (MEC) and meets minimum value standards. If not, these companies may have to pay a steep tax penalty.

According to the ACA, businesses with fewer than 50 FTEs don’t need to offer health insurance. But it’s still essential to hire the best workers in your industry.

One of the most significant barriers to offering health insurance for small to medium-sized employers is the rising cost of group health insurance. If group health coverage may be too costly for you or you don’t meet the participation requirement, you have other options.

Health reimbursement arrangements (HRAs) are employer-funded health benefits that allow you to reimburse employees for more than 200 qualifying medical expenses. Individual health insurance premiums are also eligible for reimbursement if you offer a stand-alone HRA.

Some examples of HRA-eligible expenses include:

• Prescription drugs
• Over-the-counter medicines
• Doctor visits
• Preventive services
• Emergency care services
• Eye exams
• Dental care
• Birth control

An HRA gives you complete control over health care costs while giving your employees more freedom over their benefits. They are also tax-free for employers and employees.

The two most popular stand-alone HRAs are:

1. Individual coverage HRA (ICHRA): The ICHRA is available for organizations of all sizes. The ICHRA has no contribution limits, and employers can customize their benefits using employee classes. Employees must have a qualified individual health plan to participate.
2. Qualified small employer HRA (QSEHRA): A QSEHRA is for organizations with fewer than 50 FTEs. The IRS sets annual maximum contribution limits, so it’s an excellent option for small businesses with a tight budget. Participating employees must have a health plan with MEC to take advantage of the QSEHRA.

HRAs are only available to W-2 employees. So, if your business employs 1099 contractors or international workers, a health employee stipend might be right for you.

A health stipend allows you to offer any type of worker a monthly allowance to pay for health and wellness-related expenses. However, stipends are taxable for both the employer and the employee. They also don’t meet the employer mandate requirements for applicable large employers (ALEs).

Whether you choose an HRA, a health stipend, or both, you can provide affordable health coverage that fits your budget.

Conclusion

Not every small and medium-sized organization has the budget or resources to offer traditional employee benefits. But luckily, there are many affordable and creative perks available. Combining these ideas with the benefits you already have can help you create a standout compensation package that your employees will love.

If you're ready to offer personalized health benefits, PeopleKeep by Remodel Health can help! Our health benefits administration software makes setting up and managing HRAs and health stipends in minutes each month easy. Book a call with an HRA advisor to learn how we can support you and your employees.

This blog article was originally published on November 30, 2022. It was last updated on March 10, 2025.

1. Gallup - Employee retention and turnover measures

2. IRS Publication 15-B

3. Standford study on hybrid work

4. 2024 Gen Z and Millennial Survey

5. The APA's 2024 Work in America survey

6. Employee training development stats