Which of the following is an indirect form of employee compensation?

An indirect form of employee compensation refers to benefits and perks that are not part of the employee’s direct cash pay but still contribute to their overall compensation package. Health insurance qualifies as an indirect form because it is a benefit provided by the employer that enhances the employee's well-being and security, yet does not directly put cash in the employee's pocket.

Unlike direct forms of compensation such as overtime pay, stock options, or commission, which involve immediate monetary rewards based on specific performance or hours worked, health insurance is a long-term benefit designed to provide coverage for medical expenses, thus contributing to the employee's overall compensation structure indirectly. This makes it an essential component of a competitive benefits package that can influence employee satisfaction and retention.