Short-term employee benefits definition
/What are Short-Term Employee Benefits?
Short-term employee benefits are offered to employees within the current 12-month period. They include the following:
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Absences . Compensated absences where payment is settled within 12 months of when employees render related services, for example, vacation, short-term disability, jury service, and military service.
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Base pay . Wages and social security contributions.
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Nonmonetary benefits . Medical care, housing, cars, and various subsidies for other goods or services.
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Performance pay . Profit sharing and bonuses payable within 12 months of when employees render related services.
Accumulated and Non-Accumulated Employee Benefits
The entitlement to compensated absences can be accumulating or non-accumulating. An accumulating compensated absence is carried forward and can be used in future periods. An accumulating compensated absence can be vesting , so that employees are entitled to a cash payment for unused entitlement when they leave the entity. If an accumulating compensated absence is nonvesting, then employees do not receive such a cash payment when they leave the entity.
Types of Employee Benefits
There are three types of employee benefits, which are as follows:
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Short-term benefits. These benefits include absences, base pay, medical care, and performance-based pay.
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Long-term benefits . These benefits include long-term disability, which provides benefits to employees for an extended period of time.
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Termination benefits . These benefits are only paid out after employees stop working for an employer . The main termination benefit is a pension plan.