Maximize the potential of your benefit budget

Employers have complete freedom to decide how to distribute benefits to their employees—or whether to provide them at all. However, in an increasing number of companies, employee benefits have naturally become a standard part of the rewards package.

From a company's perspective, benefits are a cost-effective way to reward employees since they aren't subject to payroll taxes. For employees, benefits are tax-free within the limits set by the tax authorities, making every euro of benefits worth more than a euro of salary.

Company's benefit policies

Employers and employees often view benefits from slightly different perspectives, which is natural since they represent different things to each.  

For companies, benefits are a key part of employer branding and workplace communication. They help attract top talent in the industry and encourage them to stay long-term. Comprehensive benefits also enhance a company’s appeal when employees compare job opportunities.  

From the employee’s perspective, it’s not just the benefits themselves that matter—it’s also how they are distributed in practice.

A larger benefit package encourages greater utilization

Since benefits are an expense for employers, they naturally want to ensure these perks help retain employees for the long term—in other words, foster commitment. To achieve this, some employers opt to distribute benefits in installments, such as twice a year.

Employees, on the other hand, often prefer a larger, once-a-year benefit allocation. This allows them to cover bigger expenses, like a premium sports hobby or a season travel card, in one go.

At Smartum, we regularly survey employees who use our benefits to understand why some remain unused. The most common reasons are:

• The employee doesn’t know how to use their benefits.  
• The benefit amount is so small it’s hard to find a practical use for it. 
• The employee simply forgets to use their benefits.  

Naturally, how benefits are budgeted depends on the financial situation of the employer, and even a small benefit package is more valuable to employees than having no benefits at all.  

Regardless of the budget size, it’s generally better to distribute the full benefit amount at once to maximize its impact for employees.

Distributing benefits once a year

From an employer’s perspective, distributing benefits once a year does come with a potential risk: an employee might leave shortly after receiving their full benefits. In such cases, the costs of the unused portion of the benefits may be seen as a loss to the employer.

However, employers have the right to deduct the value of the used benefits from the employee’s final paycheck, proportionate to their time worked. For example, if:

• benefits were distributed in January, and

• the employee used the benefits immediately, but

• the employee resigns before summer,

• the employer can deduct half the value of the used benefits from the employee's final paycheck.  

More value from the benefits

To ensure employee benefits work as effectively as possible—and that both employers and employees get the most out of them—it’s worth considering distributing the entire benefit package at once, aligned with your company’s usual benefit schedule.

Employers can also leverage benefits in various ways:  

1. Rewards: Use them to reward employees, for example, for a successful year.
2. Supplemental compensation: Offer them on top of salaries. Employers can deduct the cost of benefits in taxation, while employees are only taxed on their taxable value.
3. Wellness initiatives: Incorporate them into broader workplace wellness programs or as an alternative to voluntary insurance coverage.  

Etujen tilaaminen vuodelle 2025 on nyt mahdollista Smartum Saldossa ja Smartum Plussassa. Kirjaudu palveluun ja tee tilaus ensi vuodelle!

Log in and order benefits here.

If you’re still searching for the perfect holiday gift, why not treat your employees to an extra round of benefits? You can use the remaining benefit budget for the tax year to reward your team—just remember to distribute the benefits fairly and equally among all employees.

Read more and order benefits for the holidays here. (Website only in Finnish)