What Are Intangible Benefits?

Many companies review the benefit package offered to employees periodically. Standard benefit packages include a combination of tangible benefits, like cash bonuses, and intangible benefits, such as flexible scheduling. Intangible benefits require the company to consider alternate forms of compensating employees other than by tangible means. Companies need to know what types of intangible benefits appeal to their employees and the potential cost of offering such perks.

Benefits To Company

Intangible benefits are attractive to employers for several reasons. Employees who receive these benefits often feel appreciated and motivated to work harder. Company managers also enjoy the flexibility of choosing intangible benefits that fit each individual employee. For example, one employee might prefer to receive acknowledgment for a job well done, while another employee prefers a four-day work week. Some employees only consider working for companies that offer certain intangible benefits, like telecommuting or the prestige of working for a well-known company. Offering these benefits keeps the company competitive when acquiring new talent.

Cost To Company

Costs vary when providing intangible benefits. Some benefits cost the company nothing, such as providing an employee with temporary use of a company asset, like a meeting room or a laptop. Other benefits require an investment from the company, such as advertising the company name to build recognition and status for the employees. The cost of providing employees with vacation time varies. In some cases, the employee’s work remains untouched until the employee returns, costing the company nothing. In other cases, the company hires temporary employees or pays other employees overtime to ensure the work gets done.


Companies choose from a wide variety of intangible benefits to offer employees. Some benefits focus on the workplace environment, like maintaining a clean office space or letting the employee determine her priorities. Other benefits ease the process of attending work, such as rewarding the employee with a prominent parking spot. Other intangible benefits consider the employee’s personal life, like allowing the employee personal time off without pay.

Tax Implications

Generally, intangible benefits provided by the employer incur no tax liability for the employee. Many intangible benefits fall into the category of working condition benefits and are exempt from income tax liability. Working condition benefits include flexible scheduling, telecommuting or music playing during the workday.