Benefits Strategy

Ultimate Guide to Employee Lifestyle Benefits & How You Can Offer Them to Your Employees

Written by Kate

Research has shown employee benefits, and fringe benefits to be a major factor when deciding whether to accept a job offer. 60% of people consider benefits important in any role, and 80% of people would choose additional benefits over a pay raise.

Offering compelling benefits is essential for organizations looking to enhance their competitive edge and attract and retain talent, particularly as we face a possible recession and the Great Resignation. Providing more than a salary and standard health and dental insurance demonstrates that you genuinely care about the wellbeing of your staff. 

Read on to learn more about this topic! Click on the sections below to jump right to your specific question.

What are Lifestyle Benefits?

Lifestyle benefits aim to improve all areas of employees’ lives by providing financial, psychological and physical assistance. There are two kinds of lifestyle benefits – necessary and ancillary. 

Necessary benefits are any essential benefit or service required by an employee. Health insurance, child care and groceries all fall under this bracket, as if not covered by an employer they would need to be paid for by the worker. Necessary benefits are benefits that employees need access to in order to live and work effectively.

Ancillary lifestyle benefits are non-essential benefits which enhance emotional, personal, physical and financial well-being, including things like flexible work schedules, employee gym memberships and student loan debt assistance. 

What are Common Types of Lifestyle Benefits?

Some examples of benefits, and company perks commonly covered by organizations include:

Some insurance companies offer their own wellness reimbursement program as well, such as the Cigna gym reimbursement program, humana wellness program, or the Go365 program by Humana.

Offering lifestyle benefits shows prospective talent that you are offering more for employees than competitors, and helps give your company a competitive edge. It shows that you care about staff wellbeing and are willing to invest in them.

People are increasingly seeking a shift away from the cookie-cutter approach and looking for benefits that they can tailor to their own lives – whether it’s help with childcare or further investment in their health and fitness goals.

Examples of Lifestyle Benefits offered by Employers

Many leading organizations already offer generous personalized benefits packages. Google helped their employees with a £1000 home working employee stipend during the pandemic, adding to the free fitness classes and new parent stipend they already offer. 

Starbucks is renowned for generous benefits offered to their employees, which includes a $500-$1000 tuition reimbursement benefit to their employees looking to study. Deloitte offers $500 per year to their employees to spend on health and wellness, giving their employees the autonomy to spend this in a way that best suits their life and wellness goals.

What are the Advantages, and Disadvantages of Lifestyle Benefits?


Research has shown that nine out of ten candidates will consider company benefits before deciding whether to take a job, so offering a generous lifestyle benefits package brings many advantages.

Competitive Edge

Most employers now offer standard health benefits such as medical, dental and eye testing – you will need to offer much more in order to stand out to top talent.

To demonstrate that you are a company that cares about the life of your staff outside of work you will need to offer a varied lifestyle benefits package. This will help you stand out amongst other employers, show you are actively investing in your employees and offer your staff the chance to achieve their goals in their personal lives, as well as professional.

Engaged Employees

The shift to remote and hybrid working over the last couple of years means it is even more important to keep employees engaged. That’s why some employers have begun offering work from home stipends, and travel stipend for employees as well.

Offering benefits tailored to the individual lifestyles and needs of your staff will help your employees stay motivated in their roles.

Inclusive Culture

It’s no longer enough for organizations to say they are a diverse and inclusive workplace, they will need to show it through their actions. Lifestyle benefits offer something for everyone, whether it’s fitness classes, personal development, debt repayment or pet care and child care assistance. Offering personalized benefits helps every member of staff feel valued and will naturally lead to a diverse and inclusive company culture.

Low Cost

When compared to the salary you pay your employees, lifestyle benefits are relatively inexpensive. If you are currently unable to offer pay increases, lifestyle benefits can be a great alternative.

Benefits are valued just as much as salary. A study by MetLife has shown that half of employees would sacrifice pay for personalized benefits. Offering these benefits can keep employees motivated and attract talent to work for you – even if you can’t offer a competitive salary.

Increased Employee Retention

As we face the Great Resignation, a greater focus on retaining employees has never been more important. 49% of employees have reported seeking new employment after 12 months due to a lack of benefits given in their companies, and employee turnover can cost twice as much as an employee’s yearly salary. Therefore, it’s more important than ever to offer competitive benefits packages to employees.

Happy Employees 

Workers are 13% more productive when happy. Benefits that enhance emotional wellbeing will mean your employees will do better work, which will improve your business in the long run. If employees are happier they are also more likely to stay with your company and refer the business to their friends.


One disadvantage to offering lifestyle benefits is that deciding what to include in your package is up to you. This can add extra work and cost, and it can be hard to ensure you offer a generous package to your employees while remaining within your set budget. 

The benefits offered through lifestyle benefits and lifestyle spending accounts are also taxable and employees will add to their taxable income when they spend these funds. 

What are Lifestyle Reimbursements?

Employees can reimburse their payments for their expenses covered by their Lifestyle Spending Account, including things like gym memberships and tuition costs. This takes some of the strain away from employers having to manage expenses themselves and allows staff to reimburse their own costs. Using automated disbursement software makes this process even more simple and efficient.

How to offer Lifestyle Reimbursement Benefits through a Lifestyle Spending Account (LSA)

Lifestyle spending accounts (LSAs) are an increasingly popular option to encourage healthy behaviors in employees. They are used to cover health and wellness costs that traditional group health plans might not cover – including counseling, gym memberships and fitness classes. They are open to all employees whether they are full or part-time workers.

Staff can spend this budget in the way they choose and are able to reimburse specific types of purchases. This takes pressure away from the employer and puts the choice and autonomy in the hands of the employee. Opting for an automated reimbursement system is a great way to manage lifestyle reimbursement transactions and minimize your workload.

What is Eligible for a Lifestyle Spending Account?

The purpose of an LSA is to allow employers to invest in expenses that will improve employee wellbeing, but what this includes varies between companies. The idea is to encourage healthy habits and provide assistance across physical, emotional and financial wellbeing, which includes:


  • Exercise equipment and classes
  • Gym, health club and spa memberships
  • Entry fees to participate in sports events
  • Nutritional supplements.


  • Financial advisors and seminars
  • Home purchase expenses.
  • Family support – childcare, surrogacy, fertility treatments and adoption.
  • Student debt repayment.
  • Identity theft services
  • Pet insurance premiums


  • Counselling services
  • Retreats
  • Meditation apps
  • Park passes
  • Personal development and training.
  • Camping supplies

70% of staff members said they would be at least somewhat likely to leave their current organisation and take a job with one that is known for investing in employee development and learning. Lifestyle spending accounts are a great way to demonstrate to prospective candidates that you are an organisation investing in your employees.

As employers have control over their lifestyle spending accounts, the budgets involved and what they choose to cover will vary hugely. Contributions generally range from $500 to $2000 covering a huge range of health and wellbeing activities. Higher-end lifestyle spending accounts will cover larger expenses such as surrogacy and adoption.

What are Some Alternative ways of offering Lifestyle Benefits?

There are lots of ways you can offer lifestyle benefits to your employees, the main being offering a lifestyle spending account to allow employees to spend their benefits in the way that they choose.

Some organizations try to focus on one area at a time – an example of this is when Google offered home working stipends during the pandemic. You could also offer meal plans and grocery stipends for a couple of months to your workers. 

Another way to offer lifestyle benefits is to provide all-encompassing stipends to support a diverse range of lifestyle benefits at once. This is a good option if there are several areas you wish to focus on but lack time to manage them individually. All-encompassing lifestyle stipends allow you to set up a range of benefits in the areas that currently matter to your company – for example, travel, charities, family and pet support. You are able to cover a range of benefits and can adapt these as the needs of your team shift.

Closing Thoughts

In a post-pandemic world, people increasingly seek benefits beyond standard health insurance and want more investment in their health and wellbeing. Lifestyle benefits are an excellent way to prove to prospective talent that you are an employer who cares about your staff. 

Offering personalized benefits provide your company with a competitive edge, helping foster a diverse company culture and creating an environment where employees feel valued, productive and happy. If you would like to learn more about fringe benefits, check out this guide on the different types of fringe benefits you can offer.

Corporate Wellness Benefit Managers having a discussion while looking at an electronic tablet.

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