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California is a place where it seems like you are spinning plates to run a small business. Between running payroll, keeping customers happy, and ensuring compliance with the ever-changing state laws, the need to create employee benefits may seem to be a luxury.
But here is the reality: you do not need to bust your budget on benefits.
All they need is to demonstrate that you care.
And when implemented correctly, low-cost employee benefits can work wonders on employee retention and engagement than any raise to salary could.
At PayProNext, we deal with hundreds of small California businesses that have managed to provide real benefits in creative ways, but without breaking the bank. This one is, therefore, in your case, should you ever have thought, we can never afford benefits yet.
The job market of California is competitive, and employees are aware of their value.
They do not simply want a paycheck but purpose, balance, and a feeling that they are appreciated.
Providing employee benefits packages is a way to tell that they are a family, not just headcount. It establishes a sense of trust, retention, and will distinguish you among the companies that continue to see benefits as an option.
Even minor benefits, such as the ability to work at your own pace or reimbursements at the gym, can make the difference between you and a large company that cannot provide that personal touch.
Let’s look at 10 affordable ideas that work for real California teams.
The conventional health insurance is costly, yet even California small enterprises can do something.
The Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) of the IRS allows companies that hire fewer than 50 full-time workers to cover workers without taxes in relation to personal health insurance or out-of-pocket expenses.
That is because you will choose what you can comfortably afford, it could be $150 or $300 a month, and your team will also choose the coverage that better suits their lives.
This is the one benefit that will make you appear to be a hero in case you do not provide group insurance.
Teams are healthy when they are happy.
There is no need to have an elaborate wellness program; begin with one that is simple.
Provide a minor fitness stipend (Try a simple $30–$50/month wellness stipend) to join fitness classes or gym memberships, or even meditation apps.
California employees value flexibility they may utilize it to take hiking passes or yoga.
It is the thought that matters, and the message is obvious: we are interested in your well-being.
When your team falls under a High Deductible Health Plan (HDHP), you can establish Health Savings Accounts (HSAs) in which they can save pre-tax money, which can be spent on medical costs.
Not using HDHP? Offer a Flexible Spending Account (FSA) instead.The two alternatives decrease the amount of taxable income and contribute to financial tranquility.
The best part? The IRS recognizes them and fits well in your payroll.
California requires you to implement a retirement plan or simply enroll in CalSavers, the state-sponsored program, in case you employ five or more employees.
CalSavers targets small businesses:
You can always upgrade to a 401(k) in the future, but as long as you are within CalSavers, you will be compliant and will get your team to invest in their future.
California is not a cheap place to live in; however, some smart benefits can help alleviate the stress.
Some ideas include:
These can be tax-free under IRS Section 132, provided that they are well-documented.
And when their payroll is automated as required by EDD, they are easy to monitor.
Your staff will be glad to have the assistance, and your bookkeeper will be happy with the off.
The most intelligent type of benefit that you can provide is to invest in the development of your team.
Gen Z and millennial workers in California prefer to learn rather than have perks.
Provide incentives of $500-1000/year for courses, certifications, or conferences.
It can be deducted in full, free of tax under IRS Section 127 (up to $5 250 yearly).
And it says to your employees, we believe in your development.
We have experienced this single benefit and managed to decrease turnover by up to 30% at PayProNext.
Small business reasons why employees leave?
They are unable to envision a future there.
But you can change that.
Meet with your team on a quarterly basis to discuss their objectives and their subsequent action plan.
Where possible, promote internally. Even such a simple change in the title (e.g., Lead Designer rather than Designer) can help to enhance motivation.
When employees feel growth, they will remain even when larger firms make an offer.
In case you cannot afford to give huge increases, give time.
Flexible working hours are fabulous in a state that is known to have traffic jams.
Allow your staff to arrive early, leave early, or work two days a week offsite.
No cost. Big impact.
And the payroll negotiations are in harmony with the California wage and hour laws through the compliments of modern payroll tracking (such as that of PayProNext).
Allow the workers an opportunity to change something, and not lose their salary.
This creates loyalty and increases morale by offering one paid day off for community service annually.
It also builds your reputation within your locality.
Think of having your entire team volunteer as a team to a food bank in Sacramento; that is not only an excellent PR move, but it is also excellent culture.
Never underestimate the power of “thank you.”
Establish a basic recognition process - such as monthly praise or a gift card of $25 to any employee who excels.
It is not that expensive, yet it creates emotional equity, which cannot be purchased with money.
PayProNext goes as far as to allow micro-bonuses else auto-populated in payroll to make rewards fast and fair.
It does not necessarily have to be money. Try:
Little things can make big differences.
It is about creating an atmosphere in which individuals feel appreciated, and that will not cost a penny.
Be sure that you are adhering to California laws on payroll and tax before implementing any benefits.
The EDD expects all employers to:
And, for five or more employees or above, be sure to enroll in CalSavers to remain in compliance with state retirement requirements.
| Benefit |
Avg. Cost |
Impact |
| Flexible Hours |
$0 |
+25% engagement |
| Gym Reimbursement |
$40/month |
-11% absenteeism |
| QSEHRA |
$200/month |
+20% satisfaction |
| Training Budget |
$800/year |
+30% retention |
Even small investments lead to big results.
You’re not just improving payroll; you’re improving people’s lives.
The affordable benefits do not stem from the competition with Google or Apple.
They are about being hearted in an automated world.
Your employees do not just work with you when you provide benefits that really matter to them: health, time, purpose, and growth. They work with you.
PayProNext guides small businesses in California to make payroll simple, benefits automated, and completely compliant to get down to doing what matters: people.
Since when have your staff members succeeded, then you will also succeed.
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