Employee benefits represent the compensation paid to employees in return of the services they provide to the company.
A few categories of employee benefits include: short-term employee benefits, post-employment benefit plan, termination benefits, etc.
Short-term employee benefits are 'current' employee benefits i.e. these are expected to be settled within 12 months of the end of the period in which the related services were received from employees. These include wages, salaries and social security contributions, paid annual leave, paid sick leave, profit-sharing arrangements, bonuses (if current). These also include certain non-monetary benefits such as housing, transportation, subsidized services, medical care, etc.
Post-employment benefits (also called post-retirement medical benefits) are employee benefits which are payable after retirement. However, they do not include termination benefits. They include pensions, retirement benefits and post-retirement medical facility.
Post-employment benefit plans (also called post-retirement employee benefit plans) are arrangements between a company and its employees under which it provides retirement benefits to its employees. There are normally two types of post-employment benefit plans: the defined contribution plan and the defined benefit plan.
Termination benefits are employee benefits paid to an employee when his employment is prematurity terminated or he opts for a voluntary redundancy scheme by himself.
Written by Obaidullah Jan