4 Employee Benefits That Help You Retain Talent and Reduce Taxes

If you're a business owner in Naperville, Lisle or the Chicagoland area, finding ways to retain employees while reducing your tax bill is key to staying competitive.

The good news? Certain employee benefits can do both.

At Soriaga & Associates, LLC, we help Naperville small businesses use strategic employee perks to improve team loyalty—and cut down on taxable income. Here are four powerful options:

1. Health Insurance Contributions

Offering group health insurance is one of the most effective ways to support your team and reduce your business’s net income. Premiums paid by the employer are 100% tax-deductible, making it a smart move for both recruitment and year-end tax planning.

2. Retirement Plans (401(k) or SIMPLE IRA)

When you contribute to an employee retirement plan, you’re not just investing in their future—you’re lowering your current tax burden. Employer contributions are fully deductible, and new plans may qualify for a startup tax credit of up to $5,000 per year for three years, thanks to the SECURE Act.

3. Education Assistance

You can provide up to $5,250 annually per employee in tax-free tuition assistance, covering job-related courses or certifications. This cost is deductible to your business and positions your team for growth—without triggering payroll taxes.

4. Bonuses and Profit Sharing

Bonuses paid before year-end are fully deductible and motivate employees to stay engaged. You can also implement a profit-sharing plan to reward performance and align your team's goals with your business’s success—while reducing your taxable income.

Final Tip for Naperville Business Owners:

These benefits are not only good for employee morale—they’re strategic tax tools. If you’re not taking full advantage of them, you could be overpaying the IRS and under-investing in your team.