Benefits of being salaried employee

Benefits make up an important part of your total compensation as a salaried employee. While your salary provides your base pay, your benefits can add substantially to your overall compensation package. Maximizing your benefits is crucial to get the most value out of the perks offered by your employer.

Many companies provide benefits like health insurance, retirement savings plans, paid time off, and more for salaried employees. The mix and value of benefits can vary significantly between employers. As a salaried employee, you have a unique opportunity to optimize what your employer provides.

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Taking full advantage of workplace benefits requires understanding what is offered and using smart strategies to get the most mileage from each program. Having a thoughtful approach allows you to boost your income, save for the future, protect your health, and gain valuable advantages like paid time off and tuition support.

Maximizing benefits is about more than just using every perk available. It also means customizing offerings based on your personal situation and financial goals. Taking time to properly utilize workplace benefits can lead to increased financial security and a more balanced life

This guide will explore the key benefits available to salaried employees and provide tactics to optimize what your employer provides.

Health Insurance

Health insurance is one of the most valuable benefits provided by many employers. Salaried employees likely have several plan options to choose from, each with their own pros and cons.

Here’s an overview of the most common types of plans:

HMO (Health Maintenance Organization)

You must choose a primary care physician (PCP) within the HMO’s network of doctors. Your PCP will provide most of your care and refer you to specialists.

Services are only covered if you go to doctors, hospitals, and facilities within the HMO’s network, except in emergencies. Going out-of-network will mean paying the full cost.

Copays are required to see the doctor, usually around $20-30. All other services are fully covered after you meet your deductible.


Lowest premiums, low or no deductibles, limited paperwork.


Restricted provider network, need referrals to see specialists.

PPO (Preferred Provider Organization)

You can see any doctor or hospital without a referral, but you’ll pay less if you use in-network providers.

You pay an annual deductible, then coinsurance (usually 10-30%) until you reach your out-of-pocket max.

More flexibility with providers but will cost more than an HMO.


Freedom to choose doctors, nationwide coverage.


Higher premiums, annual deductible.

HDHP (High Deductible Health Plan)

Has a high deductible of at least $1,400 for individual coverage or $2,800 for families.

You pay all costs out-of-pocket until you meet the deductible. After that, coinsurance kicks in.

Often paired with a Health Savings Account (HSA), allowing you to save pre-tax dollars for medical expenses.

Lower premiums but very high upfront costs before coverage kicks in.


Lower premiums, ability to contribute to HSA.


Very high deductibles, more responsibility for costs.

When choosing a health insurance plan, consider your expected healthcare needs and budget. HMOs offer the lowest premiums but less flexibility. PPOs provide more choice of doctors for better coverage. HDHPs have the lowest premiums but only make financial sense if you have minimal healthcare expenses or can contribute significantly to an HSA.

Flexible Spending Accounts

Flexible Spending Accounts (FSAs) allow employees to set aside pre-tax dollars from their paycheck to pay for eligible health care and dependent care expenses.

The main benefits of an FSA include:

Tax savings: Contributions are made pre-tax, reducing your taxable income.

Access to funds – The full elected amount is available on day one of the plan year to pay for eligible expenses. This allows you to pay for predictable expenses at the start of the year.

Reduced expenses – By paying for out-of-pocket health and dependent care with pre-tax dollars, you lower your overall expenses.

There are a few key things to understand about how FSAs work:

Annual election – You elect a contribution amount at the start of each plan year. This election cannot be changed during the year unless you experience a qualifying life event.

Use it or lose it – FSAs are subject to a use-it-or-lose-it rule. This means any unused funds at the end of the plan year are forfeited. Plan carefully and be conservative with your election amount to minimize forfeitures.

Eligible expenses – Funds can only be used to reimburse eligible health care expenses for you, your spouse, and tax dependents. Non-eligible purchases will be denied.

Contribution limits – There is an annual IRS limit on how much you can contribute to a health care FSA. For 2023, the limit is $2,850. Dependent care FSAs have a separate limit of $5,000 per household.

Access to funds – Many plans will provide you with a debit card to directly pay for eligible purchases from your FSA. You may need to submit receipts later to verify expense eligibility.

The use-it-or-lose-it rule makes it essential to accurately estimate your expected health care and dependent care expenses for the coming year when deciding on your FSA contribution amount. Overestimating will lead to forfeited funds, while underestimating will lead to missed savings. Take time to understand what expenses are eligible and conservatively plan your election.

401(k) Plans

A 401(k) is a retirement savings plan sponsored by an employer. It allows workers to save and invest a piece of their paycheck before taxes are taken out. Taxes aren’t paid until the money is withdrawn from the account.

401(k)s have several key features:

  • Contribution limits: In 2023, you can contribute up to $22,500. Employees age 50 and over can contribute an additional $7,500.
  • Matching contributions: Many employers will match a percentage of your contributions – typically between 3-6% of your salary. This is free money that can supercharge your savings.
  • Tax-deferred growth: Your investments grow tax-free over time since no taxes are paid on contributions or growth until you withdraw the money. This enables faster growth compared to taxable accounts.
  • Investing options: 401(k)s allow you to invest your money, most often in mutual funds. This enables your savings to grow much more than keeping it in cash.

To maximize your 401(k), contribute at least enough to get the full employer match if one is offered. Invest your money appropriately for your age – younger workers can take more risk with stocks while older workers should emphasize bonds and cash. Consider setting auto-increase features to bump up your contribution 1% each year. Take advantage of catch-up contributions if age 50+. Review your investment options and fees annually.

The tax-deferred compound growth and employer match can make 401(k)s one of the most valuable employee benefits. Use them to build your nest egg and save for retirement.

Life and Disability Insurance

Life and disability insurance provide important financial protection in the event of serious illness, injury, or death. For salaried employees, there are a few key factors to consider when evaluating company-provided vs. individual policies.

Company-Provided Coverage

  • Many employers provide basic group life and disability insurance to employees at no cost or minimal cost. This can be an easy way to gain basic coverage.
  • Group plans may have limited customization options compared to individual plans. Pay close attention to coverage amounts, exclusions, etc.
  • If you leave your employer, you’ll lose this coverage and need to secure replacement plans. Portability options may be available.

Individual Policies

  • Allows you to shop for customized coverage tailored to your needs and budget. More flexibility in benefit amounts and add-ons.
  • Underwriting is required, so pre-existing conditions may affect eligibility and premiums.
  • Portable plans that stay with you regardless of employer.

When deciding between employer-paid and individual plans, compare costs vs. coverage. Employer plans are convenient, but individual plans allow customization. Supplementing work coverage with portable individual disability insurance can provide an extra layer of protection. Evaluate your specific needs and always read the fine print on limitations and exclusions.

Paid Time Off

Paid time off (PTO) is a valuable benefit that gives salaried employees flexibility in their schedules. With thoughtful planning, you can maximize your PTO to enjoy more time for vacations, sick days, personal matters, and mental health breaks.


  • Review your company policy to understand how vacation time accrues, any use-it-or-lose-it rules, and whether you can rollover unused day.
  • Plan your vacation schedule well in advance and put requests on the calendar early. This increases the likelihood your preferred dates will be approved.
  • If your employer allows it, save up vacation time to take an extended trip. For example, build up 3 weeks of vacation for a 2-week overseas vacation.
  • Check if your company allows buying/selling vacation days. If so, you may be able to purchase extra days.
  • Take advantage of long weekends by tacking on vacation days before or after holidays.

Sick Days

  • Don’t feel guilty about using allotted sick time – mental health days are valid too.
  • If you rarely call in sick, consider using a sick day or two for personal appointments or errands.
  • Review how many sick days roll over year-to-year. Maximize rollover if possible.
  • Find out if your employer allows sick day donations to coworkers in need. This can build goodwill.

Personal Days

  • Use personal days for religious holidays, children’s school events, weddings, moving, etc.
  • If your employer has separate sick and personal day banks, save personal days for your choice of occasions.
  • Request personal days off well in advance for predictable occasions like religious holidays.
  • Take an extra personal day before or after a vacation to extend time off.
  • Don’t forget to use allotted personal days – they don’t roll over.

Parental Leave

Parental leave policies provide employees with paid or unpaid time off work to care for a new child. This can include maternity leave for birth mothers and paternity leave for fathers. Understanding your company’s parental leave benefits is crucial when planning for a new addition to your family.

Most companies offer some form of parental leave, but the details can vary widely. Some key factors to consider:

Paid vs. Unpaid

Some companies offer partially or fully paid leave for a certain period, while others provide unpaid leave. Paid leave allows you to focus on your new child without worrying about lost wages. Unpaid leave offers time off but no compensation.


Typical maternity leave may range from 6-12 weeks paid and up to 12 weeks unpaid under the Family Medical Leave Act. Some companies offer more generous leave of 4-6 months or longer. Paternity leave tends to be shorter, often 1-4 weeks.


Most parental leave benefits only apply after being employed for a certain period of time, such as 12 months. Both full-time and part-time employees are sometimes eligible.


Options may include taking leave all at once or breaking it up over a period of time. Some parental leave can be used on an intermittent basis.

Coordination with Other Benefits

You may be allowed to combine parental leave with accrued sick days, vacation time, short-term disability, etc.

When negotiating job offers, ask about parental leave and understand the details before accepting. Time this benefit well during life changes like expanding your family. Consult your HR department to optimize use of available parental leave.

Tuition Reimbursement

Many companies offer tuition reimbursement programs to help employees pay for continuing education. This valuable benefit allows employees to pursue degrees and certifications relevant to their current role or future career goals.

Here are some tips for maximizing tuition reimbursement:

Understand the Requirements

Carefully review your company’s tuition reimbursement policy so you understand eligibility requirements, covered expenses, and reimbursement limits. Many companies require you to be employed for a certain period of time before becoming eligible.

Coursework also needs to relate to your current position or reasonable future roles within the company. Reimbursement is often capped each year, with many companies offering $3,000-$5,000.

Choose an Accredited Program

Make sure the degree or certification program you select is accredited and aligns with your career goals. Communicate with your manager to ensure the course of study is applicable and will provide value.

Submit Necessary Documentation

Once enrolled, save receipts for all covered expenses like tuition, books, and fees. After completing the course, submit forms, proof of payment, and your final grades. Grades are often required to be a B or higher to qualify for reimbursement.

Use Available Funds Each Year

Since reimbursement amounts reset annually, maximize your benefit by using all available funds each year if possible. Look for opportunities to take multiple courses or complete certifications.

Pay Out-of-Pocket Upfront

Tuition reimbursement is normally received after completing a course. Be prepared to pay tuition and expenses yourself initially and get reimbursed later.

Consider the Tax Implications

Find out if your reimbursement will be taxed as income. If so, you may need to adjust your W-4 withholdings.

Taking advantage of tuition benefits can empower you to reach your full potential. Do your homework to understand the details and make the most of this valuable workplace perk.

Employee Discounts

Employee discount programs provide special savings on things like cell phone plans, travel, restaurants, retail stores, entertainment, and more. This perk allows you to stretch your earnings further and save money on purchases you’d make anyway. Discounts are usually offered through partnerships with major brands and local businesses. Make sure to explore what discounts are available so you don’t miss out on the savings.

Strategizing and Negotiating

When considering a job offer or planning for your annual benefits enrollment, take time to strategize and negotiate to maximize the value of your benefits package.

Here are some tips:

Do your research: Review your current benefits usage to see what you actually use. Look into the standard benefits offered in your industry and location. Talk to colleagues about what benefits they find most valuable.

Prioritize what matters most: Make a list of your must-have benefits like health insurance for your family or generous vacation time. Have a second tier of nice-to-have perks.

Understand the full compensation: Your base salary is just one component. Calculate the total value of the entire compensation package including benefits.

Negotiate respectfully: Avoid an entitled, demanding approach. Frame benefit requests in terms of your needs and value to the company.

Consider trade-offs: You may get a better package by accepting a lower salary in exchange for improved benefits. Or negotiate for benefits instead of a pay raise.

Get promises in writing: If the company agrees to special benefit arrangements like future telecommuting options, get it documented.

Re-evaluate annually: Your needs and company benefit offerings change over time. Strategize each open enrollment period.

With preparation and strategic negotiation, you can craft an optimal benefits package that provides security and enhances your quality of life.

Disclosure: This post may contain affiliate links, meaning we receive a commission for purchases made through these links, at no cost to you.

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