11 money benefits your company gives you

You may not know this but your employer often hands out non-cash benefits. Make sure you claim them!

Employee benefits sometimes include indirect or non-cash components of the remuneration package paid to you.

However, it is also paid with salary as allowance for a particular item related with an employee's personal expenses.

Some of employee benefits are mandated by law while other benefits vary from company to company.

Common employee benefits offered by companies in India are discussed below:

1. Provident fund

Employee Provident Fund (EPF) is the provident fund for employees of organised and unorganised sector, while General Provident Fund (GPF) is meant for government employees.

The contribution (minimum 12 per cent) made by employer and employee is same in both -- EPF and GPF but interest rates may vary.

The interest rate is announced by related authorities from time to time.

Both provident funds involve pension and deposit linked insurance scheme. The employee has to complete 10 years of service to be eligible to get the pension after the age of 58 years.

There is an option to commute a portion of pension into a lumpsum payment.

As per law, an establishment having more than 20 employees has to compulsorily register with EPFO.

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Gratuity is a one time lumpsum benefit for the employees working since 5 years or more.

Gratuity Act is applicable to all establishments, where number of employees, are 10 or more in any day of the preceding 12 months. It is paid as 15 days' basic salary + Dearness Allowance for each completed year of service.

Though it is fully tax exempted for government employees, for others it is exempted up to a limit of Rs 10 lakh.

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House rent allowance (HRA) is to meet house rent expenses of the employee.

It is computed as a per cent of basic salary which varies between 50 per cent for metro cities to 30-40 per cent for class A or B cities.

If an employee is allotted an accommodation, his HRA is deducted.

4. Dearness allowance

Dearness allowance (DA) is a cost of living adjustment allowance paid usually to government employees and pensioners. It is a percentage of basic salary to mitigate the impact of inflation.

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Leave travel allowance (LTA) is paid for travel expenses for a journey within India.

The employee is entitled for leave for specified days to travel with her/his family and only travel expenses are borne by the company.

However, there are certain conditions associated with LTA such as one has to take the shortest route to the travel destination.

Economy air fare of national carrier and AC first class rail fare is eligible for LTA.

Some companies pay LTA on monthly basis making it a part of the take-home salary.

6. Superannuation Fund (SAF)

A SAF is a Voluntary Pension Plan that can act as a supplementary social security pillar in addition to EPF.

On retirement, an employee can withdraw a portion of SAF and balance has to be put in an annuity.

Government maintains its SAF with NPS to provide this benefit to its employees.

Usually, private employers make contribution in a group superannuation policy if they want to provide this benefit to their employees. Many times, private companies pay superannuation allowance to its employees with monthly salary.

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Employees are covered under group mediclaim policies for their medical emergencies. Premiums of such policies are paid by the employer.

8. Medical reimbursement

A company pays medical allowance to its employees for their medical expenses as medical treatment and medicines. If the bills are provided, amount up to Rs 15,000 is tax exempt.

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ESOPs give the right to an employee to buy the stock in future at a pre-determined price. It is very popular among corporates to retain talented employees.

10. Employee stock purchase plan

ESPP is a benefit given whereby an employee can purchase the stock of the company at a discounted price. The company also offers to pay the price in monthly installments which is deducted from monthly salary.

Some private companies go beyond benefits defined by statutory acts and give more to employees. They usually design tax efficient salary structure and sometimes even offer their employees to design their salary structure for the given CTC.

11. Restricted stock units (RSUs)

Some companies give employees stocks (of the same company) after a waiting period.

Such waiting period is called vesting period and such stocks are referred as restricted stock units.

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