How to Create an Employee Benefits Program

The restaurant industry has always been competitive. But as the industry faces a historic restaurant labor shortage, the race to attract and retain top talent has never been more intense.  According to data outlined in Benefit News, as of 2024, 82 percent of restaurants are actively hiring, but more than 60 percent of restaurant operators say they’re struggling to find enough staff to keep up with demand. 

In this market, where restaurant staffing is still 3.6 percent below pre-COVID levels, skilled employees have options for where to work. And if you want the best employees to choose your restaurant over other job offers, you need to make their health, happiness, and well-being a top priority. And one of the most impactful ways to show your team they’re a priority? Offering a robust benefits package.

Your benefits package has an immeasurable impact on your restaurant’s ability to attract and retain top talent. But why are benefits so important? What kinds of benefits do employees want most? And how do you put together an attractive benefits package when you’re operating on a budget?

Let’s take a deep dive into everything you need to know about restaurant employee benefits in 2025:

Why Restaurant Employee Benefits Matter More Than Ever

Restaurant employee benefits have never mattered more than they do today. Investing in competitive benefits offers restaurants a significant edge in today’s historically tight labor market by:

Making it Easier to Attract Top Talent…

A robust benefits package can make it easier to attract and hire skilled employees for your restaurant. According to recent employee insights from Toast, more than half of restaurant workers are dissatisfied with their current benefits package—and a typical response to said dissatisfaction is to leave the door open to better opportunities. As such, restaurants with compelling employee benefits have a competitive edge and are better able to attract top talent—including talent that’s already employed.

…And Retain Top Talent

Solid benefits won’t just help you attract good employees; they’ll also help you keep those employees at your restaurant.

Employees know that not all restaurant benefit packages are created equal—and if they leave your restaurant (and its competitive benefits) behind, there’s a huge chance that the benefits at their new restaurant won’t compare. Investing in employee benefits can differentiate your restaurant in an increasingly competitive labor market and incentivize employees to stay with your restaurant for the long-term—both of which help you increase employee retention, reduce turnover, and reap all the rewards that come with a competitive benefits package, like lower labor costs and higher-performing teams.

Minimizing Turnover Costs

The restaurant industry is known for high turnover—and that’s definitely true in today’s market. According to the Job Opening and Labor Turnover Survey (JOLT) from the U.S. Bureau of Labor Statistics, in June 2025, the food and accommodation sector (which includes restaurants) saw a staggering 823,000 employee separations.

And this high turnover rate can translate to serious costs for restaurant operators. According to data from Toast’s comprehensive guide on reducing turnover, the average cost to replace an hourly restaurant worker is about $6,000. And given the high turnover rate—and how frequently (and often quickly) many employees leave restaurant jobs—it can be easy for turnover costs to spiral out of control.

Because employees value benefits, the right benefits package can help reduce turnover in your restaurant—and minimize turnover costs in the process.

Prioritizing Work-Life Balance 

Work-life balance is a top priority for many of today’s employees. In fact, data from the Randstad Workmonitor 2025 report shows that, for the first time, in 2025 work-life balance officially surpassed pay as the top-ranked motivator for modern employees—including both Gen Z (74 percent vs. 68 percent) and Millennial (83 percent vs. 81 percent) employees.

Because work-life balance is so important to workers, offering benefits that support that work-life balance—like flexible scheduling, mental health support, and paid time off—is a non-negotiable for your restaurant to stay competitive. 

Helping your employees achieve a better work-life balance supports both your workers and your restaurant. For workers, access to benefits that support work-life can cause a cascade of positive effects, like better emotional regulation, improved moods, and increased energy—and those positive effects can make them more engaged with and effective at work, which directly benefits your restaurant.

Creating a Stable Workforce

As mentioned, the right benefits package can have a huge impact on employee retention. And the more employees you can retain, the more stable your workforce—and restaurant—will be.

A stable workforce can support your restaurant in a number of ways, including:

• Improved operations. The longer an employee works for your restaurant, the more experience they gain—and the more they learn about how your restaurant operates. They know what needs to happen during each shift, when it needs to happen, and how to do it correctly—and building this kind of stable workforce of experienced, long-term employees virtually guarantees that your restaurant will run more smoothly. 

• Better customer service. In addition to understanding your restaurant operations, long-term employees also understand how to treat your customers. They know the menus like the back of their hand, can handle difficult patrons without breaking a sweat, and pride themselves on delivering the best customer service experience to everyone who walks through your restaurant’s doors. These are the employees who attract repeat customers—and, in the process, bring more revenue into your restaurant.

• Lower costs. Stable restaurant teams typically experience minimal turnover, especially when compared to industry averages. And if you can maintain a low turnover rate, you’ll spend less money on hiring and training new employees for your restaurant—and reduce your labor costs in the process.

Bottom line? In today’s market, benefits are a non-negotiable part of attracting, supporting, and retaining high-quality staff—which is a non-negotiable part of building a successful restaurant.

Essential Benefits Every Restaurant Should Consider

There’s no one-size-fits-all approach to creating an employee benefits package. There are, however, certain key benefits that every restaurant should consider, like:

Healthcare

Healthcare remains one of today’s most sought-after employee benefits, with 74 percent of employees naming health insurance as a top priority.

Depending on your employees, team size, and restaurant budget, there are a number of healthcare options you might include in your benefits package, including:

• Traditional medical plans. These health insurance plans offer full coverage for employees and dependents, including preventive care and prescription coverage. Medical plans range in price; typically, plans with high deductibles and co-pays are less expensive—while plans that offer more coverage tend to be priced higher.

• Flexible spending account. If your budget doesn’t allow for a full medical plan (or even if it does!), you may want to consider adding a flexible spending account (FSA) to your benefits package. FSAs are employer-sponsored accounts that allow employees to set aside pre-tax dollars (up to $3,300 in 2025) to cover qualified medical expenses, reducing their taxable income.

• Telemedicine. In-person doctor visits can be time-consuming, inconvenient, and expensive. That’s why telemedicine is considered such an attractive benefit. With telemedicine benefits, employees can schedule virtual appointments with healthcare practitioners—appointments that are often less expensive, less time-consuming, and more convenient than seeing clinicians in person.

• Mental health. All employers should aim to offer mental health coverage. But it’s especially important for restaurant operators to prioritize mental health benefits—because employees are at risk. Mental health issues are extremely common in the restaurant industry; for example, one study found that 60 percent of servers at upscale restaurants have at least one mental health diagnosis, such as depression or anxiety, while 70 percent of chefs report experiencing anxiety from working in restaurants. And according to the Substance Abuse and Mental Health Services Administration, the restaurant industry is the most at risk for illicit drug use and substance abuse—with 17 percent of workers having an official substance abuse disorder diagnosis. 

• Dependent care coverage. Approximately one in five U.S. workers is currently caring for a child, parent, or other dependent—and that level of responsibility can take a major toll, including at work. Caregiving is associated with increased stress, decreased productivity, increased risk of health issues (both physical and mental), and higher rates of absenteeism—all of which can impact an employee’s work performance. Offering support for dependent care can relieve some of that stress—and help your caregiver employees better manage their work and dependent-related responsibilities. 

Supplemental insurance. To round out your employee healthcare benefits, you might also add supplemental insurance options that support their health and well-being, like parental leave, accident insurance, short-term disability, life insurance, and/or dental and vision coverage.

Is Your Restaurant Required to Provide Health Coverage?

Your restaurant absolutely should consider offering health coverage to employees—but that doesn’t necessarily mean you’re required to. 

Under the Affordable Care Act (ACA), restaurants with 50 or more full-time employees—also known as Applicable Large Employers, or ALEs—are required to offer affordable health coverage to full-time employees. Coverage must meet all ACA standards for affordability and minimum essential coverage.

For more guidance on health coverage requirements and if/how those requirements apply to your restaurant, visit the ACA FAQ page on the IRS website.

Paid Time Off (PTO)

Paid time off (PTO) is considered an extremely important benefit for the majority of U.S. employees—and if you want your benefits package to attract top talent, it should definitely include PTO.

When it comes to how to structure your PTO benefits, you have two options:

• Accrual system/method: With the accrual method, employees accrue PTO hours gradually over time. As the employer, you set an accrual rate, which determines how much PTO an employee earns each work period (for example, each hour, week, or month). The more an employee works, the more PTO they accrue. As their available PTO grows, the employee can request time off work—and as long as the request is approved and they have enough hours accrued, they’ll still get paid their regular rate for their time off.

• Lump sum method: With the lump sum method, the employer gives employees their entire annual PTO allowance all at once (for example, at the beginning of the year or when an employee completes the restaurant’s benefits qualification period). Because employees have access to all their PTO at one time, they can request time off (up to their allotted hours) at any time throughout the year.

While PTO is an important benefit, if it’s not managed well, it can wreak havoc on your restaurant. Here are some best practices to ensure your PTO benefits support your employees and your restaurant:

• Create your PTO policy. In order for PTO to work for your restaurant, you need to be clear on what PTO means to you. Before you announce PTO benefits to your employees, make sure to get clear on your PTO policy. This includes eligibility requirements (for example, do both full and part-time employees qualify?), accrual rate, PTO structure (accrual vs. lump sum), differences (if any) between sick time and vacation/personal time, PTO request requirements (for example, timelines and deadlines for requesting PTO), shift coverage requirements, and any PTO exemptions or blackout dates. 

• Plan for scheduling gaps/issues. It takes a lot of people to successfully run a restaurant—and if employees regularly take time off with no/minimal notice and/or don’t find coverage for their shift, it can throw a wrench in your employee scheduling process and overall restaurant operations. Make sure your PTO policy sets your restaurant up for success; for example, you might set a cut-off date for requesting PTO (for example, two weeks prior to the requested time off) to allow time for effective scheduling, make finding shift coverage a prerequisite for PTO approval, or set limits on how much PTO employees can take during peak times.

• Distribute the policy to employees. Once you’re clear on the details, assemble them all in a clear, easy-to-understand PTO policy, including a signature page. Distribute to all eligible employees and have them sign and date the signature page acknowledging that they’ve received, understand, and will comply with the policy. For future hires, you can add the PTO policy to your employee handbook and have them review and sign during the onboarding process.

• Cross-train your team. Once PTO benefits take effect, employees will take advantage of them. Make sure to cross-train your employees on important tasks, roles, and responsibilities; that way, nothing falls through the cracks—regardless of who’s taking PTO and who’s covering their shift.

Retirement Plans

No employee wants to work forever. Retirement plans support your employees’ long-term financial security and help them save (pre-tax!) for their eventual retirement.

There are a number of retirement plans you can offer your restaurant employees, including:

• 401(k)s

• Roth IRAs

• Simple IRAs

All of these plans offer employer matching, which allows you to use pre-tax business revenue to match your employees’ retirement contributions up to a pre-set amount. With this service, employees can contribute as much as they want towards their retirement savings (up to the maximum contribution limit, which varies by account type)—but you would only match their contributions up to the pre-set matching percentage. 

For example, let’s say your employer matching rate is 3 percent. If your employee contributes 2 percent of their earnings, you would also contribute 2 percent. If they contribute 3 percent, you’d contribute 3 percent. But if they contribute 4, 5, or 7 percent, you would still only contribute 3 percent, the maximum employer match.

Profit-Sharing Programs

Profit-sharing programs—which reward employees for the restaurant’s success by sharing a percentage of the profits—are another benefit that supports your employees’ financial stability. Because they tie the restaurant’s performance directly to your employee’s compensation, these programs can increase motivation, make employees feel more invested in the business, and incentivize team members to work hard.

Employee Assistance Programs (EAPs)

Being an employee—including in the restaurant industry—can sometimes be a struggle. Employee Assistance Programs (EAPs) provide accessible, ongoing support to employees, helping them better navigate and manage both personal and professional challenges.

There are a variety of EAPs you may want to include in your restaurant employee benefits package, including:

• Financial counseling to help employees manage debt, budgeting, and savings

• Mental health support to provide access to counseling or therapy services

• Legal assistance to support employees with legal questions or issues

• Substance abuse support to provide access to counseling or rehabilitation services

Professional Development

According to the Workmonitor report, 72 percent of employees agree that training and development are important for their current and/or future employment. But the report also found that less than half the workers surveyed (44 percent) trust their employers to invest meaningfully in continuous learning.

In other words, employees want opportunities for professional development—but in many workplaces, those opportunities just don’t exist. So, adding professional development programs to your benefits package can be a great way to stand out from the competition and attract top talent to your restaurant.

Depending on your staff and their goals, these programs might include:

• Skills training programs. These programs are designed to strengthen their skills in the workplace. For example, you might offer culinary, management, and/or customer service programs to help your team hone their skills and become better chefs, restaurants, or servers.

• Tuition reimbursement programs. These programs reimburse employees who pursue relevant education (for example, a sous chef pursuing a culinary arts degree or an upcoming restaurant manager enrolling in an accounting class to better understand financials and payroll). Tuition reimbursement can be a win-win for both the employee and the restaurant. The employee gains valuable skills that can open the door to professional growth and enhance their job performance—and the restaurant gets higher-performing staff.

• Certification support. Similarly, offering reimbursement for industry-specific certification programs (like ServSafe, Cicerone, or Sommelier programs) can be beneficial for both your employees and your restaurant—as the more your staff understands about restaurant operations, the more effective they’ll be at work.

• Leadership development: While some people are natural-born leaders, others need to hone their leadership skills before stepping into a managerial or supervisory role. Leadership development programs help promising staff members develop the skills they need to successfully transition into restaurant management.

Transportation and Commuter Benefits

Not all employees have access to reliable transportation and/or the funds to cover commuting costs—which can make getting to work (and getting there on time) a real challenge. Transportation and commuter benefits make it easier and more affordable for all employees to get to work, which can reduce absenteeism, increase on-time arrivals, and support employee retention. Depending on the available transportation options in your area, these benefits might include:

• Public transit subsidies to offset the cost of monthly passes for buses, trains, or subways

• Parking stipends to reimburse expenses for parking at or near the restaurant

• Rideshare partnerships for staff without reliable transportation and/or employees working outside of public transportation operating hours (like late-night shifts)

Budget-Friendly Benefits for Small Restaurants

Benefits aren’t just for large restaurants. Even small restaurants working on a tight budget can assemble a benefits package that attracts top-notch employees—and keeps them there for the long term:

Benefits Under $250/Month Per Employee

For a small restaurant, a $250/month per employee budget can open the door to a number of competitive benefits, like:

• Basic health insurance 

• Professional development stipends

• Transportation allowances

• Employee assistance programs

Benefits Under $100/Month Per Employee

Even small restaurants with a tighter budget of $100/month per employee can stretch those dollars to offer great benefits for their staff, like:

• Meal discounts. Offering discounted dining for off-duty employees and their family members not only shows your employees you care, but also helps them save money on food.

• Recognition and rewards programs. Employees want to be recognized for their contributions. Rewards programs are a low-cost way to celebrate outstanding performance, show appreciation, and motivate top employees to continue working hard.

• Team-building activities. Modern workers don’t just want a job; they want a work community. According to the Workmonitor report, 84 percent of workers say a sense of community at work is important to their mental health and wellbeing—and 85 percent of respondents state that they perform better when there is a sense of community at work. Team-building activities are a great, cost-effective way to foster that sense of community—and for both your restaurant and your staff.

Creative No-Cost Benefits

No benefits budget? No problem! You can still offer perks that support your employees and give your restaurant a competitive edge in this tight labor market, like:

• Flexible scheduling offers a better work-life balance for employees—which, as mentioned earlier, is a top priority for today’s workers.

• Cross-training opportunities build skills and increase job security for employees.

• “Employee of the Month” programs provide public recognition for top employees, which can drive engagement and motivation.

• Family meal traditions offer free meals to on-shift workers, ensuring your employees are well-fed before their shift while simultaneously strengthening team culture and building community.

FAQs

What benefits do restaurant employees want most?

Research shows that modern workers—including restaurant employees—want benefits that support work-life balance (like flexible scheduling and PTO), health (like medical insurance and mental health coverage), professional development (like training programs or tuition reimbursement), and financial well-being (like retirement plans). 

How much do restaurant employee benefits cost?

There’s no universal cost for providing employee benefits. Your total cost for benefits will vary based on a number of factors, like the size of your restaurant and the types of benefits you offer.

What’s the average restaurant employee turnover rate?

The restaurant industry has some of the highest turnover rates across any sector. Currently, the average annual turnover rate in restaurants is just under 80 percent—with employees staying in their restaurant jobs, on average, just 110 days.

Are restaurant owners required to provide benefits?

Under the Affordable Care Act, businesses with 50 or more full-time employees are legally required to provide affordable health insurance options to their team—so if your restaurant has 50 or more full-time staffers, you are required to provide a health plan that meets ACA requirements.

What are some perks you offer your employees at little to no cost to the company?

You don’t necessarily need a big budget to create a benefits package that appeals to modern workers. Perks like free meals, team-building activities, flexible scheduling, and robust training programs can help you more effectively attract and retain top talent—and do so at little to no cost to your restaurant.