Today’s employees expect more than just a paycheck. They want to feel supported, appreciated, and connected to your company’s mission. To meet those expectations, you need a well-rounded approach that supports all aspects of the employee experience. That starts with understanding the difference between employee benefits, perks, and rewards.
By clearly defining and strategically applying each, you can build a more thoughtful and effective employee experience strategy that contributes to a thriving workplace and helps you better support your team. In the sections that follow, you’ll learn how benefits, perks, and rewards each play a unique role and how to use them effectively to meet the needs of today’s workforce.
What are employee benefits?
Employee benefits are the foundation of your total compensation package. They're the non-wage offerings that help your employees stay healthy, financially secure, and supported in their personal lives.
According to the U.S. Department of Labor, benefits fall into two categories:
- Legally required (Mandatory) benefits like Social Security, Medicare, and workers' compensation.
- Voluntary (Discretionary) benefits like health insurance, retirement plans, and paid time off.
In Canada, employee benefits also include a combination of mandatory and optional programs.
- Mandatory benefits include contributions to the Canada Pension Plan (CPP), Employment Insurance (EI), and workers’ compensation.
- Optional benefits typically include extended health and dental coverage, life and disability insurance, retirement savings plans (like group RRSPs), and wellness programs.
While the specifics vary by country, the purpose remains the same: to support your employees’ overall well-being and make your organization a more attractive place to work.
Benefits usually apply to all full-time employees and aren’t tied to individual performance. They’re often detailed in employment contracts and designed to meet basic needs employees would otherwise pay for themselves. Having a strong benefits package matters because it’s directly tied to how employees evaluate job opportunities and how long they stay with an organization.
The SHRM Employee Benefits Survey found that 88% of organizations view health benefits as highly important, and 81% feel the same about retirement plans and paid leave. At the same time, 70% of employers have expanded or enhanced their benefits offerings in response to labor shortages. These changes reflect a bigger shift in expectations. Your employees are looking for support with real-life challenges like healthcare, financial planning, and time off to recharge. Offering strong benefits shows you understand what people need to succeed both in and out of the workplace.
Examples of employee benefits
These are some of the most common benefits companies offer to support their employees’ health and security:
- Paid time off (PTO): Paid time away from work, including vacation, sick leave, and parental leave. Offering generous PTO helps improve well-being and productivity.
- Health insurance/extended health coverage: In the U.S., employers often provide health insurance to help employees manage medical expenses. In Canada, where basic healthcare is publicly funded, many employers offer extended health and dental coverage to fill gaps not covered by provincial plans.
- 401(k), retirement plans, or RRSP matching: In the U.S., 401(k) plans help employees prepare for retirement. In Canada, similar support is offered through group Registered Retirement Savings Plans (RRSPs) or pension plans. These benefits are key to attracting and retaining talent, with 93% of workers saying retirement benefits influence whether or not they’ll take a job.
- Stock options: Equity-based compensation that gives employees a stake in the organization’s success. This is especially appealing in startups and high-growth organizations looking to align team members with long-term goals.
- Pre-tax transit assistance/commuter benefits: Programs like subsidized transit passes or parking stipends help reduce commuting costs. In both Canada and the U.S., these can be offered with tax advantages depending on local regulations.
- Workers' compensation: Legally required in both the U.S. and Canada, this insurance provides financial and medical support to employees injured on the job.
You can think of benefits as the foundation of your employee experience strategy. They meet essential needs and show employees that you’re invested in their well-being. Once you’ve covered the essentials, you can start thinking about how to enhance your everyday employee experience and culture with employee perks.
What are employee perks?
Employee perks are non-wage offerings that give employees something extra beyond their salary and core benefits. They're not essential or required, but they play an important role in supporting a positive, enjoyable people-first workplace culture.
Perks are typically not tied to performance or tenure and often apply to all full-time employees. They might cover things employees wouldn’t normally spend money on themselves, like wellness stipends, office snacks, or team outings.
Whether your organization operates in the United States, Canada, or both,, perks offer a flexible way to personalize the employee experience and show that you care about what matters to your team.
Examples of employee perks
These are examples of perks organizations often use to reinforce their culture and improve employee satisfaction:
- Flexible hours or remote work: Scheduling flexibility and work-from-home options give your employees more control over when and where they work. This is increasingly expected in both U.S. and Canadian workplaces.
- Free snacks or meals: Food and beverages provided during the workday to support convenience and foster workplace connection.
- Gym memberships or wellness stipends: Wellness-focused offerings that encourage physical activity and promote health. This contributes to your employees’ well-being and productivity. In Canada, some employers include these perks as part of a broader wellness benefit plan.
- Tuition assistance or education stipends: Financial support for continued education, often tied to professional development goals. In both the U.S. and Canada, this may also come with potential tax advantages and helps employees grow in their careers.
- Employee retreats: Off-site or virtual events that build camaraderie and strengthen team relationships.
- Childcare support: Support that helps your working parents manage caregiving responsibilities. This allows them to stay focused at work, reduce their stress, and better manage their attendance.
Perks may vary widely by industry, company size, or location, but they all serve one purpose: to help employees feel more supported in their day-to-day lives and connected to the company’s culture.
Once you’ve established how to support your workforce through employee perks, the next step is recognizing how individuals contribute to your company’s success. That’s where employee rewards come in.
What are employee rewards?
Employee rewards are performance-based offerings that recognize individual or team contributions. They are a key part of a broader employee recognition and rewards program, and are designed to reinforce the behaviors, achievements, and milestones that matter most to your organization.
Unlike benefits or perks, rewards are not given universally. While they do support the overall employee experience, they are designed to be given to employees individually to recognize effort, outcomes, or impact. Because of this, rewards have a powerful effect on employee motivation and overall performance.
Whether your workforce is based in the United States, Canada, or spread across global locations, a well-designed rewards program can be tailored to local preferences while staying aligned with your global values.
Examples of employee rewards
These are some of the most common ways organizations recognize and celebrate employee contributions:
- Milestone rewards: Recognition for work anniversaries, project completions, promotions, or other meaningful career moments. These help build loyalty and show employees their long-term contributions are appreciated.
- Performance-based bonuses: Financial incentives tied to individual or team achievement. These are widely used across North America to motivate employees to meet and exceed goals by aligning rewards with effort.
- Recognition platforms: Technology that allows employees and managers to give and receive public appreciation. These platforms make recognition consistent, visible, and accessible across your entire organization. In fact, switching to a consolidated Employee Recognition & Rewards platform can help organizations reduce reward costs by 15-20% while increasing impact.
- Point-based rewards systems: Programs where employees choose their own rewards based on earned recognition points. This flexibility makes recognition more meaningful, as employees can choose what matters most to them—whether that’s concert tickets, merchandise, time off, or a donation to a cause they care about. (Note: In both the U.S. and Canada, certain types of rewards like cash or gift cards may be taxable. It’s a good idea to consult your finance or payroll team to ensure rewards are handled properly for compliance and reporting purposes.)
Why rewards need to be tied to recognition for maximum impact
For a reward to truly motivate an employee, they need to know why they’re receiving it. A gift or bonus without context can feel confusing or even transactional. But when you connect that reward to specific feedback—what they did, why it mattered, and how it contributed to a bigger goal—it turns into something memorable and meaningful. This connection helps reinforce the actions and behaviors you want to encourage across your team.
Keeping recognition and rewards consistent can be challenging, no matter the size or structure of your organization. Whether you're a small business or a global organization, the right tools can make it easier to deliver meaningful, timely recognition that scales with your team.
That's where technology can make all the difference. The right recognition and rewards platform gives you one place to send, manage, and track recognition across your entire organization. It helps you make sure rewards are timely, transparent, and clearly connected to the behaviors you want to reinforce. More importantly, it helps you build a culture where appreciation is consistent, not something that only happens once in a while.
Tying it all together
A strong employee benefits package, thoughtful perks, and meaningful employee rewards give you a complete strategy for supporting and motivating your workforce. Benefits provide the stability your employees need to feel secure in their roles. Perks create a positive, day-to-day experience that reflects your culture. Rewards reinforce individual effort and performance in a way that moves your business forward.
On their own, each of these tools adds value. But together, they build a lasting employee experience that strengthens engagement, builds loyalty, and helps your organization thrive.
