Benefits vs Perks Guide

Beyond providing salaries, startups typically offer benefits and perks to their team.  

Benefits are compensation items that supplement your salaries but are not wages. They’re designed to cover the basics you’d have to pay for out-of-pocket.  Benefits packages fall into five core categories: paid leave, supplementary pay, retirement, insurance, and legally required benefits. 

Perks are things that would make your individual life a little easier - and often boost business productivity as well. 

BENEFITS: 

There are quite a few software options out there for you to consider as an “all-in-one” solution for your team. These solutions solve your payroll and your benefits needs simultaneously in one software system. They are really nice options because they simplify your life and keep everything under the same organizational system. 

The most common software solutions early-stage startups use are: 

If you don’t like the pre-packaged benefits options that come with these online services, many of them offer you the option to opt out and select your own benefits plans. Most of these software solutions also seamlessly integrate with federal and state tax management and retirement plans. 

Equity 

One of the most valuable benefits of working at an early-stage startup is equity. One way to think about equity is that the more risk someone is taking on at the company, the more equity they get - i.e., your earliest employees often get a larger piece of the equity pie. You can offer folks a total package and they can decide which ratio of cash to equity makes sense for them, based on their financial needs. 

Carta is widely known as the place where most startups go to have their equity managed - along with advice from your lawyers. Carta offers quite a few resources online about understanding equity for folks who are new to working at - or with - startups:   

Retirement 

Many startups offer matching retirement plans for employees so that they can start putting money aside for their future. There are many options out there, but here are a few commonly-used resources for you to consider: 

Paid Time Off and Sick Time

Although unlimited time off sounds great, it can also be problematic. Often the wrong people take advantage of this policy – and your hardest workers never take a break. By having “use-it-or-lose it” days, you can encourage folks to rest up so they’re ready to return with fresh energy. 

It’s common for PTO + sick days in the US to include: 

  • 10 days paid holidays (make sure to identify which holidays are recognized as company holidays throughout the whole year) 

  • 14 days paid vacation

  • 2 days paid personal leave

  • 8 days paid sick leave

You may also want to consider offering a few “shut down” periods for your team - time where the whole company takes a break, but the days don’t technically count as PTO. The truth is: nothing gets done between Christmas and New Years, anyway, so you might as well give those days to your team to let them fully embrace the holiday season. The same is true for July 4th in the US; it’s an easy win to give your team the days off before or after Independence Day to make it a long weekend. 

For lab-based team members, you may want to make explicit how they can take advantage of holidays and shut-downs since they may not be able to take a break in the midst of a long experiment. 

Family and Medical Leave

Family medical leave includes maternity and paternity leave - as well as other reasons to have medical leave at your startup. The government has guidelines here on FMLA, but you will also want to consult your state and local laws regarding leaves: 

Mental Health

Many health benefits organizations already include mental health offerings in their benefits packages but, if it’s important to you, you may want to explicitly offer some options for your team to manage their mental health which may include subscriptions - or discounts - to some well-known resources such as: 

Training and Development

Investing in learning is a great way to foster a culture of learning on your team. Having some resources to invest in individual development can also be very helpful for emerging managers and signals that your organization is investing in your people who are working toward their career goals. 

You may want to explore building a learning program that invests more resources into teammates as their longevity in the organization increases. 

Here are some learning opportunities you may want to consider offering: 

  • Classes and workshops: You can host classes or workshops for your team to skill up or you can offer tuition support to an individual who wants to take a class elsewhere. 

  • Coaching: You can offer a budget or a certain number of hours of coaching to level up.  

  • Subscriptions: You can offer to pay for part - or all - of subscriptions to journals, publications, or podcasts.

  • Book fund: You can give each person on your team a learning budget to spend on books. 

  • Tuition reimbursement: You can pay for some portion of tuition towards a class that will help with professional development and growth.   

  • Conferences + travel budget: You can pay for some or all of the costs for travel or participation in conferences that will help teammates learn and connect with peers.  

PERKS

Transportation benefits

You may want to offer transportation benefits to anyone who needs to be in person for any portion of their work schedule. These perks may include: 

  • Parking pass

  • Commuter rail or train pass

  • Pre-tax commuter accounts

  • Bicycle maintenance or new bikes 

  • Uber/ride funds

  • Emergency ride home funds for anyone who takes public transportation regularly 

  • Flight payments for folks who need to travel onsite periodically  

Bonuses

It’s nice to have more cash! You can privately give someone a spot bonus when they do an extraordinary job. You can also reward the team, collectively, when big milestones are achieved. The idea here is to make sure incentives are aligned with your company’s goals – and your values. If collaboration is important to your team, explore if there are ways to reward folks for their collective success. 

Company Retreats

Consider hosting a company retreat somewhere beautiful - or exotic. 

Childcare Assistance

For those employees with children, you may want to offer childcare assistance for them such as: 

  • Daycare, afterschool, summer camp tuition support 

  • Dependent care flexible spending accounts (pre-tax dependent care accounts)

  • Tutoring 

  • Extracurricular activity support 

  • Emergency babysitting services 

Other Perks to Consider: 

  • Student loan assistance: Help paying off student loans 

  • Recognition and rewards programs: Rewarding specific values or efforts 

  • Legal advice benefits: Access to discounted legal advice 

  • Financial advising: Individual coaching for financial advice and planning 

  • Housing: Support with downpayments, rent, mortgage, or construction 

  • Lunch stipends: Uber eats or discounts to specific restaurants 

  • Gardening benefits: Money to create a home garden

  • Vacation fund: Money towards travel and leisure activities 

  • Massage: On-site mini-massages or resources to get your own  

  • Self care (hair cuts, manicures etc): On-site visits to make life  easy

  • Shopping: A personal shopper or help acquiring business attire 

  • Ergonomic office support: Funds to make your workspace healthier for your body

  • Fertility support: Support for couples having trouble conceiving 

  • Sustainability:  Composting, solar panels, etc. 

  • Gym memberships or home gym resources

  • Home organizers 

  • Meal delivery kits or services 

  • Dry cleaning 

  • House cleaners 

  • Grocery delivery 

  • Pet care - dog walking etc. 

Wrapping up 

Whatever you choose to do, make sure that your choices incentivize the behaviors that you seek to have on your team. It’s helpful to periodically collect and review data about who is using which resources and to ask for input to make sure that what you’re offering is truly meaningful to your team.