These benefits may not appear in the employer’s CTC offer but can make a big difference for the employees.
Be it the first job or the subsequent jump, most individuals are focused on the salary on offer. However, there are some non-salary benefits that one enjoys when he is employed. It makes a lot of sense to take into account these benefits also while choosing your next employer. “List what is on offer and arrive at money value to compare a job offer with another,” says Rohit Shah, founder of Mumbai-based Getting You Rich, a personal finance advisory platform.
Amit Trivedi, founder of Karmayog Knowledge Academy, too, looks positively at all employer-provided benefits but advises individuals to check the strings attached with the benefits and the limitations of these benefits.
Insurance: Most professionally-managed companies offer insurance cover to their employees. The insurance covers both death and hospitalization. The life insurance cover is a fixed amount and capped at three times annual cost to company (CTC) of the individual. If one is working at a CTC is of Rs 5 lakh per year, he will enjoy a life cover of Rs 15 lakh. The health cover on the other hand is in the range of Rs 1 lakh to Rs 3 lakh in most cases. Some companies offer higher cover in case of employees in metro cities. Many companies also offer personal accident insurance cover which pays a fixed sum in case of accidental death and dismemberment.
If your future employer is not offering these benefits, then you may have to buy it on your own. This may cost you good amount of money. In some cases, due to poor health one may not get these covers on individual insurance platform.
“You should know the exclusions and sub-limits in the group insurance provided by employer,” says Amit Trivedi. Many times, the cover on offer is inadequate. For example, the rule of thumb calculations pertaining to life insurance ask an individual to buy a life insurance cover equal to 10 times his annual income. That makes it clear that employer provided life insurance is inadequate, especially in case of young employees.
Hence, one should not be content with employer provided life insurance. It is better to assess one’s life insurance need using a life insurance calculator.
Loans from banks/NBFCs: If you are working with a bluechip company, banks are keen to offer you a loan. Some banks and NBFC view employees of large companies as better prospects as compared to employees of SMEs, as the former enjoys much job stability as compared to later. The loan’s interest rate on offer is also attractive if compared with the rate offered to one employed with a relatively unknown company. This is especially true if you are looking for a personal loan. The rate could differ by as much as 5-6 percentage points, depending on where you work.
Residential facilities: Some companies offer their employees residential facilities in prime locations. Public sector units and some old companies have ‘employee quarters’ in the prime locations in various cities. Some employers also arrange for healthcare and education facilities within the residential premises of the employees. Even if one is willing to pay for accommodation in such locations, he may not get one. That makes these offers attractive. “Though one can evaluate such options by taking into account the rent he would have paid otherwise, it is difficult to quantify the peace of mind one may enjoy due to superior infrastructure,” says Rohit Shah.
But here is a word of caution. The employee can stay in such facilities as long as he is in the employment of the company. If he decides to resign or retires at the age of superannuation, he is expected to vacate his house. There is also a risk that the apartments may not be well-maintained.
Loans offered by employers: Some employers offer home loans and personal loans to the employees at subsidized interest rates. That makes a good saving for the employee. But a word of caution, if you decide to resign, you have to pay off the entire loan to the employer.
“When taking a loan from the employer, make full disclosure of the purpose of loan to your employer, to avoid payment of excessive tax,” says Vertika Kedia, co-founder of tax2win. For example, in case of loans taken for treatment of diseases specified, one need not pay any tax. If the total loan amount availed does not exceed Rs 20,000 one need not pay tax. However, in all other cases where the loan amount exceeds Rs 20000, be it interest free or at the concessional rate the savings on the interest front are taxable in the hands of the employee.
Sponsored training / professional education: Experts say survival in the corporate world depends on the ability of the employee to learn and unlearn. Employers also seek higher productivity from the employees and want to invest in employees. In-house training sessions are arranged by many employers, to ensure re-skilling of their employees. Some employers also encourage employees to take up professional courses and sponsor such spends. “In case of large investments in training, sometimes employers ask employees to sign a bond. One should study the bond before entering into such an arrangement,” says Amit Trivedi.To sum up, these benefits may not appear in the employer’s offer in CTC details but can make a big difference for the employees.