What are Short-Term Employee Benefits?

Short-term employee benefits are offered to employees within the current 12-month period. They include the following:

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.
Base pay. Wages and social security contributions.
Nonmonetary benefits. Medical care, housing, cars, and various subsidies for other goods or services.
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:

Short-term benefits. These benefits include absences, base pay, medical care, and performance-based pay.
Long-term benefits. These benefits include long-term disability, which provides benefits to employees for an extended period of time.
Termination benefits. These benefits are only paid out after employees stop working for an employer. The main termination benefit is a pension plan.