How to win and keep top talent with fringe benefits

Fringe benefits are an important part of the total compensation package for employees in Canada. For HR professionals, understanding how to offer and manage fringe benefits is essential to attract and retain talent, support employee well-being, and ensure compliance with tax laws.  

This article explores the types of fringe benefits available, what Canadian employers commonly offer, how to choose the right benefits, tax implications, why fringe benefits matter, and new trends shaping the future of employee benefits. 

Mandatory vs. fringe benefits 

Before we talk about employee perks, let’s go over benefits mandated by law. These are part of the basic employment standards; employers are required to follow them or face fines and lawsuits. 

Here are some of Canada’s mandatory benefits: 

• Canada Pension Plan (CPP) or Quebec Pension Plan (QPP): Employers must contribute to one of these pension plans for all eligible employees. This provides retirement, disability, and survivor benefits 

• Employment Insurance (EI): Employers are required to deduct and contribute to Employment Insurance. This provides temporary income support to workers who are unemployed, on maternity/parental leave, or on sick leave 

• Workers’ compensation: Each province and territory has its own workers’ compensation board. Employers must register and pay premiums to provide coverage for workplace injuries or illnesses 

• Vacation pay: Employers must provide a minimum amount of paid vacation (usually two weeks per year, increasing with years of service) and pay vacation pay as set out in employment standards laws for each province/territory 

• Public holiday pay: Employees are entitled to paid public holidays, with the number and dates varying by province or territory 

• Statutory leave: Employers must provide certain unpaid or paid leave, such as maternity, parental, compassionate care, and bereavement leave, as required by federal or provincial law 

Visit our section on compensation and benefits for related news and real-life case studies.  

Common fringe benefits offered by Canadian employers 

Fringe benefits – also known as non-wage benefits, supplemental benefits or employee perks – are provided by employers in addition to regular salaries. These benefits play a crucial role in enhancing an employee’s total compensation package, supporting work-life balance and promoting long-term retention.  

Here are the most common fringe benefits Canadian employers offer to attract and retain talent: 

Health and wellness benefits 

These may be given on top of universal health care that workers in Canada enjoy. Some of these fringe benefits include: 

Health and dental insurance 

Most Canadian employers provide extended health and dental coverage. This may include: 

• dental care 
• vision care 
• prescription drugs 
• paramedics services 

Health benefits are among the most valued types of fringe benefits, helping employees manage healthcare costs for themselves and their families.  

According to a 2023 survey, 41 percent of Canadians access benefits (i.e., eye care, dental care, prescriptions) through a workplace plan. 

Gym memberships and wellness programs 

Subsidized or free gym memberships, wellness challenges, and nutrition counselling are increasingly popular as employers focus on holistic employee health. 

Mental health support 

Access to counselling, employee assistance programs (EAPs), and mental health days is becoming standard. EAPs also offer confidential support for personal and work-related issues. 

Well-being programs are great, but as a panel discussion at HRFutureFest 2025 showed, what's more important is addressing the root cause of employees’ health issues. 

Financial and retirement/insurance benefits 

Retirement savings plans 

Group RRSPs and defined contribution pension plans are common, with many employers matching employee contributions. These plans help employees build long-term financial security. 

Employee discounts 

Discounts on company products or services, or through partnerships with other businesses, are a popular way to reward staff and add value to the overall benefits package. 

Company car and transportation 

Some employers provide a company car or subsidize public transportation, making commuting more affordable. Free parking may also be included. 

Life and disability insurance 

Group life insurance and both short-term and long-term disability insurance are standard offerings. These provide financial protection for employees and their families in case of illness, injury, or death. 

Fringe benefits for remote workers 

The rise of remote work has changed the way employers think about fringe benefits. According to Robert Half, 29 percent of new jobs were hybrid, while 12 percent were fully remote in early 2025. As more Canadians work from home, organizations are adapting their benefits packages to meet growing needs. 

Here are some fringe benefit examples for remote workers: 

• equipment allowance: Many employers now offer a stipend or reimbursement for home office equipment, such as ergonomic chairs, desks, and monitors 

• tech support: Providing laptops, high-speed internet subsidies, or IT support helps remote employees stay productive 

• virtual health services: Access to telemedicine, online counselling, and virtual fitness classes is becoming a standard part of the benefits package 

• mental health resources: Employers are expanding access to mental health support and encouraging regular check-ins to help combat the feeling of isolation 

• flexible hours: Allowing employees to set their own schedules helps them balance work and personal responsibilities, especially when working from home 

For more ideas on what you can offer, here are the best employee benefits for remote workers. 

How to choose the right fringe benefits 

Selecting the right fringe benefits for your people requires careful consideration of employee needs, business goals, and budget constraints. Here are some steps you and your team can take: 

Find out what employees want 

Start by assessing employee needs. Conduct surveys regularly to get a feel for what benefits your people value most.  

Demographics is another consideration. Gen Z employees, for example, prioritize mental health support, while Gen Xers value retirement planning and access to financial health tools. Find out more in Benchmarking Benefits and Generational Considerations. Sign up to CHRR+ to access the full report.  

Align these with business goals 

This is an important point in securing buy-in from decision makers. Fringe benefits that align with the organization’s goals are easier to justify, making approval more straightforward. 

If the goal is to recruit top talent, benefits might include health insurance, a company car, or relocation support.  

If the organization’s immediate priority is to retain talent, consider options like stock grants, employee-sponsored development and training, or flexible working arrangements.  

Balance cost and value 

Not all benefits are equally valued. Focus on those that provide the greatest return on investment. This also means encouraging the uptake of fringe benefits, making sure they’re maximized. For example, as a CHRR report says, EAPs can help, but only if employees use them.  

Stay competitive 

Find out what others in the industry are offering. Review what other employers have in store. Make sure that your benefits package remains competitive. 

As your workforce evolves, so should your fringe benefits. Stay informed about emerging trends and employee expectations. 

Look at the full picture when making decisions on benefits 

Having said all this, it’s important to look beyond employee surveys and benchmarking results. While these practices are useful, they don’t give HR managers the full picture. Relying solely on these methods can lead to gaps between what employers offer and what employees value. 

Use a broader range of data, such as demographic and usage insights, to better align benefits with employee needs and improve satisfaction. 

Tax implications of fringe benefits in Canada 

Many fringe benefits are considered taxable by the Canada Revenue Agency (CRA). This means the value of the benefit is added to the employee’s income and taxed accordingly. Examples include: 

• company car: the personal use of a company car is a taxable fringe benefit 
• merchandise discounts: in general, these are taxable 
• gym membership: whether this is taxable or not depends on different scenarios. Membership under the employer’s name, for example, is not taxable 

Other benefits, meanwhile, are non-taxable, such as: 

• employee-paid premiums for private health services 
• company-issued cell phone for official use 
• disability-related benefits 

Employers must accurately report taxable fringe benefits on T4 slips and withhold the appropriate taxes. Failure to do so can result in penalties and interest charges. 

The laws are not always clear-cut, so it’s best to check the CRA’s guide on taxable benefits and allowances. If you need further advice, contact an employment benefits lawyer in your province or territory.  

Emerging trends in employee incentives 

Fringe benefits – what's available and what’s desirable – are always changing. Canadian employers are responding to the needs of the business and their people by introducing benefits such as: 

Mental wellness programs 

There’s been greater focus on mental health and well-being, especially during and after the pandemic. Employers are increasing coverage for mental health services, including therapy and counselling. 

Access to wellness apps, meditation platforms, and digital health resources is on the rise. In a McKinsey survey, more than 25 percent of respondents said that they used digital wellness apps. 

Personalized benefits packages 

Employees can choose from a menu of benefits to create a package that suits their needs. This approach recognizes the diversity of the workforce. 

Some employers offer accounts that employees can use for wellness activities, fitness classes – even pet insurance! And this has made an impact. Case in point: 84 percent of employees with access to pet insurance are happier at work. 

Support for diversity, equity, and inclusion 

Fertility treatments, adoption assistance, and parental leave policies are expanding to support diverse family structures. Employers are also introducing leave policies that honour cultural and religious holidays. 

Why fringe benefits are important 

Fringe benefits play a vital role in supporting employee well-being, increasing employee engagement, and driving business success. These benefits can: 

• attract and retain talent: A comprehensive benefits package can set your organization apart in a competitive job market. Employees are more likely to join and stay with employers who offer meaningful benefits beyond salary 

• support work life balance: Benefits like flexible work arrangements, paid time off, and wellness programs help employees balance their professional and personal lives, leading to higher job satisfaction and lower turnover 

• lead to higher productivity and engagement: When employees feel valued and supported through fringe benefits, they are more engaged and productive 

• address diverse needs: A well-designed benefits package recognizes the diverse needs of your workforce, from young professionals to those nearing retirement. Offering a range of fringe benefits ensures that all employees feel supported 

Maximizing fringe benefits for your people 

Fringe benefits are more than just perks—they’re a key part of your organization’s success. By offering the right mix of benefits, you can attract top talent, boost retention, and support employee well-being. 

Before implementing a benefits package, take a good look at what your people need. Is there a gap between what’s on offer and what they’re asking for? Is there a fundamental need that hasn’t been addressed? Only then will your benefits package truly work – both for your employees and your organization.  

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