An employee benefit plan is an arrangement where you as an employer give various non-wage compensations to employees in addition to their wages or salaries. Benefits can include: group insurance (health, dental, life, etc.), disability income protection, retirement benefits, sick leave, vacation, social security, profit sharing and funding of education.
As a rule, the benefits paid by the plan are considered to be employment income. The purpose of the benefits is to increase the economic security of employees.