How to Provide More Benefits Without Busting the Bank Ideas for making the most of employee benefits.

Providing benefits that meet employee needs and mesh with all the laws isn't cheap. Benefits probably add 30 to 40 percent to base pay for most employees.

That makes it crucial to get the most from these dollars. But this is exactly where many small business fall short, because often their approach to benefits is riddled with costly errors that can get them in financial trouble with their insurers or even with their own employees.

The most common mistakes: absorbing the entire cost of employee benefits, covering nonemployees, sloppy paperwork, not telling employees what their benefits cost, and giving unwanted benefits.

There are plenty of benefits that cost your company little or nothing but reap huge rewards in terms of employee satisfaction and loyalty. Consider these ideas:

Negotiate discounts with local merchants for your employees.
Hotels, restaurants and amusement parks may offer discounts on their various attractions, including lodging and food, through corporate customer programs. Warehouse stores, such as Sam's Club, allow discounted membership to employees of their corporate members. Movie theaters provide reduced-rate tickets for companies' employees. Don't forget to offer employees free or discounted prices on your company products and services.

Ask a local drycleaner for free pickup and delivery of your employees' clothes.
Or ask a garage for free transportation to and from work for employees having their cars serviced there. Many businesses are willing to provide this service to capture -- and keep -- new customers.

Offer free lunchtime seminars to employees.
Health-care workers, financial planners, safety experts, attorneys and other professionals will often offer their speaking services at no charge. Education is beneficial for both your employees and business.

Offer supplemental insurance plans that are administered through payroll but are paid for by the employee.
Carriers of health, life, auto and accident insurance typically offer these plans at a lower rate to employers, so everybody benefits.

Offer a prepaid legal services plan administered through payroll but paid for by the employee.
Like insurance, the purpose the prepaid legal service is to provide protection against the emotional and financial stress of an employees' legal problems. Such services include phone consultations regarding personal or business-related legal matters, contract and document review, preparation of wills, legal representation in cases involving motor vehicle violations, trial defense services, and IRS audit legal services. The employer deducts the monthly service fee from the paychecks of those employees who want to take advantage of the service. Typical fees range from $9 to $12 per month per employee.

Consider an interest-free computer loan program.
Making it easier for employees to purchase computers for their personal use increases the technical productivity of employees on the job. The employee chooses the computer and peripherals based on the employer's parameters. (For example, the entire package may not exceed $3,000.) The company purchases the system, allows the employee to take it home, and deducts the payments from his or her paycheck. Although there's some initial capital outlay, it is recouped quickly. Any computer experience an employee can gain at home will most likely enhance his or her proficiency in the workplace.

Let employees purchase excess inventory from your business at a significant discount via sample sales or employee auctions.
Arrange these purchases in conjunction with regularly scheduled company-wide "yard sales" for employees to buy and sell their personal belongings.

One of the most appreciated but most overlooked benefits is membership in a credit union. There are some 6,000 well-established, state-chartered credit unions throughout the United States and Canada that accept startup businesses as members -- at no charge. The benefits to your employees are threefold. Most likely they'll increase their savings rates (especially if you offer automatic payroll deduction), they'll have access to lower loan rates, and they'll pay lower fees -- if any -- for services.