Running a small business today isn’t easy. Between rising costs, staffing challenges, and keeping up with compliance requirements, it can feel like there’s barely enough time in the day to get everything done. One area that often gets pushed to the back burner is employee benefits.
But here’s the truth: benefits matter—sometimes just as much as pay. Employees today expect more than just a paycheck. They want support that helps them manage their health, finances, families, and careers. And for small businesses, offering the right mix of benefits can be the difference between keeping a great employee long term or losing them to a competitor down the road.
In this guide, we’ll walk through what employee benefits are, why they’re important, the types of benefits small businesses can offer, and some affordable options you may not have considered. We’ll also cover some common questions we hear from Maine and Northeast employers about building a benefits package.
Employee benefits are forms of compensation provided to employees beyond wages or salaries. Some benefits are legally required, such as Maine Paid Family & Medical Leave, unemployment insurance, and workers’ compensation. Others are optional, like health insurance, retirement savings plans, or wellness perks.
Why are benefits so important? Because they:
For small businesses in particular, benefits are a strategic tool. Every employee plays a critical role, and replacing one can be costly. Offering meaningful benefits—even on a budget—helps build loyalty and reduces turnover.
Not every small business needs (or can afford) the exact same benefits package as a large company. But that doesn’t mean you can’t be competitive. Many small businesses are finding creative ways to support employees without breaking the bank.
Here are some examples:
Even if you can’t offer remote work, small adjustments like staggered start times, a four-day workweek in slower seasons, or hybrid arrangements can make a huge difference for employees managing family and personal responsibilities.
Employees, especially younger workers, want to grow. Offering a training stipend, access to online courses, or mentoring opportunities shows you’re invested in their future—and helps your business build a more skilled team.
From gym memberships to earned wage access apps, wellness perks don’t have to be expensive. Even small investments in mental health or fitness benefits can reduce stress and help employees feel supported.
These examples illustrate an important point: you don’t have to choose between doing nothing and offering a huge, expensive corporate package. A thoughtful mix of affordable, flexible benefits can go a long way in making your business stand out as an employer of choice.
When building a benefits package, it helps to think in categories. Here are some of the most common—and affordable—types of benefits small businesses can offer:
Fringe benefits are perks that supplement traditional benefits. These can include things like commuter stipends, gift cards, employee discounts, or volunteer days. They’re often low-cost but high-impact, especially when tied to your company’s culture or values.
Certain employers can offer a more affordable health insurance alternative, known as ICHRAs, as opposed to traditional health insurance. Introduced in 2020, ICHRAs allow employers of any size to reimburse employees for their individual health insurance premiums. Unlike traditional group health plans, ICHRAs give employees the freedom to choose a plan that works best for them and their families. Employers can decide how much to contribute, and there are no maximum contribution limits. These arrangements can be offered to all employees or to specific classes of employees, giving small businesses flexibility while still offering a valuable health benefit.
Investing in your employees’ growth pays off for everyone. Tuition reimbursement, professional certifications, job shadowing, or leadership workshops are ways to help employees build skills and feel more engaged. For smaller budgets, offering access to online courses or creating a mentorship program within your company can be just as valuable.
Beyond health insurance, some small businesses add dental, vision, life, or disability coverage. Even if these are offered as voluntary benefits (meaning the employee pays the premium but gets group rates through your plan), they’re still highly valued. In fact, several states, including Maine, are adding requirements around retirement plans and paid family leave, so it’s important to know what’s mandatory in your state.
The one-size-fits-all model is disappearing. Flex benefits allow employees to choose what’s most meaningful to them. This might mean providing a set stipend employees can spend on what matters—whether that’s child care, continuing education, or wellness programs. Flexibility ensures your benefits package appeals to employees across different life stages.
Here are some of the most common questions we hear from small business owners and HR managers:
A small business benefits package usually includes the legally required benefits (Maine PFML, unemployment insurance, workers’ comp, etc), plus optional offerings like health insurance, retirement savings, paid time off, and additional perks. Even if you start small, building a package that reflects your company culture can set you apart.
Every business has a unique benefits package based on company size, budget, employee needs, etc. A “normal” package could include health insurance, dental/vision, retirement contributions (like a 401(k) match), and paid time off. Larger employers may add disability coverage, life insurance, and wellness perks. For small businesses, “normal” can vary—what matters is finding benefits that work for both your team and your budget.
Most companies outline their benefits during the hiring process, in employee handbooks, or on internal HR portals. As a small business, transparency is key—make sure your employees know exactly what you’re offering and how to use their benefits.
Yes and no. All businesses must provide legally required benefits like Maine's PFML, unemployment insurance, and workers’ comp. Once you hit 50 or more full-time equivalent employees, the Affordable Care Act requires health insurance coverage. States, including Maine, may also mandate retirement plans or paid leave programs. For smaller businesses, most benefits beyond the basics are optional—but highly encouraged if you want to attract and keep talent.
Because employees expect them. Studies show that benefits are one of the top factors employees consider when accepting or staying in a job. Without a solid package, you risk losing talent to competitors who offer better support. Beyond hiring, benefits also improve morale, reduce turnover, and increase productivity.
The cost varies depending on what you offer. According to the U.S. Bureau of Labor Statistics, benefits can make up about 30% of total compensation costs. For small businesses, health insurance is usually the biggest expense, but options like HRAs (Health Reimbursement Arrangements), ICHRAs, pooled association plans, or voluntary benefits can keep costs manageable. Don’t forget: some benefits, like flexible scheduling or wellness stipends, cost little to nothing.
Open enrollment is the period when employees can sign up for, or make changes to, their benefits—most commonly health insurance. Employers usually hold open enrollment once a year, often in the fall for coverage starting in January. During this time, employees choose the plans that best meet their needs for the upcoming year.
Small businesses can purchase health coverage in a few ways:
In Maine, many small businesses also explore pooled association health plans to reduce costs and expand options.
Employee benefits aren’t just for big companies. With thoughtful planning, small businesses can create benefits packages that support employees, attract top talent, and keep their businesses compliant with ever-changing laws.
At Paper Trails, we know how challenging it can be to balance compliance, cost, and employee expectations. That’s why we help businesses across Maine and the Northeast understand their options, navigate the legal requirements, and create benefit strategies that make sense for their teams.
Whether you’re offering your very first benefits package or expanding what you already provide, remember: you don’t need to do everything—you just need to do the right things for your people.