Employee Financial Wellness Program: What Is It and How Can It Benefit a Small Business?

Update: The tax law signed in early July makes permanent the exclusion for qualified educational assistance that an employer can provide when matching student loan payments for an employee's education. The employer may make tax-free contributions either through direct payment to the lender or reimbursement to employee. The limit remains $5,250, although this amount will be adjusted for inflation beginning Jan. 1, 2026.

Original article

Financial well-being has become increasingly complex for today's workforce. Between persistent inflation, mounting debt levels, and cost-of-living increases that outpace wage growth, many employees find themselves wrestling with daily financial stress. Healthcare costs keep climbing, housing remains expensive, and everyday expenses stretch budgets even thinner.

This financial pressure doesn't stop at your office door. When team members worry about making ends meet, it can affect their focus, productivity, and job satisfaction. That's where an employee financial wellness program proves valuable.

In fact, the Employee Benefit Research Institute (EBRI) found that half of small employers already offer financial wellness initiatives, with another 28% implementing them.* This shows financial well-being isn't just personal, it's a business priority that benefits both employees and your bottom line.

What Is Employee Financial Wellness?

Financial wellness or well-being refers to overall employee financial health and financial literacy, paired with the absence of money-related stressors such as unforeseen expenses. But it goes beyond simply having enough money in the bank. It's about your employees feeling confident and in control of their financial situation.

What does financial wellness in the workplace mean for businesses? When employees feel financially secure, they're more likely to stay with your company longer, take advantage of the benefits you're already offering, and approach their work with less distraction — factors that can all impact the business significantly.

Why Is Financial Wellness Important?

Many employees may be experiencing unexpected bills, little or no savings, and the need to take a second job, all factors that can lead to financial stress. Your workers' worries could compound even further due to a lack of financial knowledge or a basic understanding of money matters in the first place.

Employees who have their personal finances in order (the ability to pay bills on time, have savings and emergency funds set up, etc.) are often in a better position to put their energy and focus on work, be more engaged, and stay productive. On the other hand, an employee who struggles financially may be unproductive if they must deal with money matters during work hours. They may also be frustrated or disengaged, which can cause a ripple effect throughout the rest of your staff.

What Is a Financial Wellness Program?

Employers may want to implement a workplace financial wellness program for employees to help combat stress related to money. These programs educate employees to help them manage their money and reduce financial burdens.

Financial wellness programs in the workplace typically span four key areas: spending, saving, borrowing, and financial planning. They may include personal financial coaching on specific topics, online education, budgeting tools, credit resources, alternatives to traditional banking, and flexible access to earned wages.

Examples of How Employee Financial Wellness Programs Can Help Employees

A financial wellness program can help employees with a variety of economic challenges. These can range from saving for a major life event — a wedding, first home, education, or retirement — to managing everyday expenses such as bills and debt payments. Employees may also struggle to understand the importance of having savings, and they may only fully understand the ramifications of this when they experience an emergency.

A lack of financial knowledge can hold anyone back. Left with few reliable resources like where to find information and get financial questions answered, your employees may continue to struggle. As diverse as your employees are, so are their levels of financial knowledge. Some might excel at long-term planning but struggle with day-to-day budgeting, while others need help understanding credit basics.

EBRI's research shows that small employers are getting smart about this by prioritizing financial counseling, budgeting tools, and debt management, as these areas directly tackle what keeps employees up at night.*

Common employee financial wellness program examples may include:

Household Budgeting

Employees may need help creating a budget for the first time, getting expenses under control, and setting realistic goals that work for their household budget.

Managing Credit and Debt

Workers often want to better understand how credit works, improve their credit scores, or develop strategies for handling student loans, refinancing options, and debt management.

Investing

Investing topics may include planning for retirement, understanding different account types available, and figuring out the best starting point based on age and financial goals.

Saving

Employees may ask for money-saving tips and strategies, financial guidance on creating an education savings plan, and how to choose between saving and investing.

Taxes

Common concerns include reducing the risk of tax-time errors, maximizing deductions, and understanding tax benefits for education, moving, and homeownership.

Insurance

Your workforce might need guidance on choosing between insurance types, selecting appropriate life insurance coverage, or understanding long-term care and disability options

Banking

Banking education could include finding the right checking and savings accounts, plus secure ways to manage money online without unnecessary fees or complications.

What Are the Benefits of Employee Financial Wellness Programs?

Financial wellness benefits can have an immediate impact on employees' financial challenges. Traditional financial services often fail to meet the needs of everyday workers, particularly those with low-to-moderate incomes (LMI). More broadly, these benefits can also have a long-term positive impact on their contributions and engagement at work.

Help Employees Reduce Stress

You may offer benefits to encourage healthy habits, but financial challenges can be a significant source of stress for employees. When team members face rising stress levels, it can have a negative impact on both their performance and productivity.

Small business owners are catching on to this connection: According to EBRI, most small businesses consider their employee well-being efforts, including workplace financial wellness programs, to be highly effective.* Adequate support can help employees manage stress and solve problems.

Reduce Absenteeism

An employee struggling with a money issue may need to take time off to handle the problem or simply be too overwhelmed to focus on anything else. An effective financial wellness program aims to help employers mitigate absenteeism rates, and it often delivers. Over half of small employers surveyed say it reduced both absenteeism and tardiness.

Improve Employee Productivity

Financial stress is a silent productivity killer in many workplaces. A financial wellness program can help alleviate these pressures, allowing employees to focus more on their work and less on their financial worries.

Small businesses are seeing real results, with 53% reporting that their financial education programs significantly boosted productivity. These results rival those of larger companies.*

Form a Stronger Personal Bond With Staff

Programs that offer financial wellness for employees can be customized to address specific financial issues your workers may face at any given time. You may want to survey your staff anonymously and ask what topics such a program could address to boost their financial confidence.

When you receive feedback about topics of interest, structure the timing of programming to align with your team's personal financial goals and realities. For example, employees may express their need to build savings in an emergency fund. The financial wellness program can offer introductory resources on creating a budget or steps for setting up a savings account. The more relevant your financial wellness initiatives are to your staff, the more your business can benefit.

What Other Ways Can Employers Help Employees Enhance Their Financial Wellness?

In addition to offering a financial wellness program, employers can consider offering the following benefits and resources that may help employees make better money management decisions.

Split-To-Save Feature Through Direct Deposit

If you offer direct deposit, you can encourage better saving habits with a split-to-save feature. This allows employees to designate a fixed portion or percentage of their paycheck each pay period into a designated account.

Auto-Enrolling in a 401(k) Plan

Offering a retirement plan is a powerful way for employers to help employees automate contributions for their non-working years. An auto-enrollment feature in a 401(k) plan takes this a step further: Eligible employees are automatically enrolled in the company's plan at a default contribution rate — streamlining the enrollment process and still giving them the option to opt out if desired.

Employee Assistance Programs With Financial Wellness Services

An employee assistance program (EAP) can help employees resolve a variety of issues that might adversely affect their work performance. From financial challenges to resources that assist in handling stress, an employee assistance program provides a confidential source that employees and their families can use to find support. A mentally healthy workplace is good for business, so consider taking steps to improve the mental health of your employees.

Student Loan Assistance

Thanks to SECURE Act 2.0, which took effect in 2024, employer matching contributions to an employee's 401(k) are possible when that employee makes student loan payments. This holds a two-fold benefit for employees, who can continue paying off student loan debt while saving for retirement. However, this provision is optional and may not be available in all retirement plans.

Employee Wellness Program

A wellness program may offer education, wellness challenges, biometric screenings, and anything else to help staff make better lifestyle choices. It's an employer-initiated approach to improve employee health and wellness by supporting and encouraging healthy behaviors. While this isn't a replacement for insurance, wellness programs are geared toward making proactive health decisions, which could help curb costly medical conditions down the line.

Earned Wage Access

Give employees the option to access their earned wages early, helping them manage emergencies without waiting for payday. This benefit not only eases financial stress during unexpected situations but also fosters a sense of trust and understanding between employers and their workforce.

How Much Does a Financial Wellness Program Cost?

Cost concerns often top the list when small businesses consider new employee benefits, but EBRI's survey reveals an interesting finding: less than 30% of small employers cited expenses as their biggest challenge with financial wellness programs.* This suggests the perceived cost barrier might be higher than the reality.

Not all financial wellness programs are alike, and businesses have different budgets to devote to such a resource. As such, the costs of a financial wellness program can depend on many factors, including company size, how much you want to customize the program, account management and support features, and whether you want employees to be able to access advisors or personalized help. Some employers pass the full cost to employees — about 24%, according to EBRI — but this approach can hurt participation rates.*

A smarter strategy might be exploring bundled options through providers you already use, such as your payroll service. Many offer financial wellness resources as add-ons to existing services, which can help with both cost management and benefits administration.

Calculate the ROI of a Financial Wellness Program

Measuring the return on investment for your financial wellness program helps justify the expense and identify areas for improvement. Here's how to calculate it.

1. Identify and quantify benefits by tracking metrics like reduced absenteeism, lower turnover rates, decreased healthcare costs from stress-related issues, employee engagement, and improved productivity.
2. Determine total program costs, including subscription fees, implementation expenses, and staff time dedicated to program management.
3. Calculate net benefit by subtracting your total costs from the dollar value of your quantified benefits.
4. Calculate ROI by dividing the net benefit by your total program costs, then multiply by 100 for a percentage.

For example, if a small business spends $5,000 annually on a financial wellness program but saves $8,000 through reduced turnover and absenteeism, the net benefit is $3,000. Dividing $3,000 by $5,000 gives you 0.6, or 60% ROI.

How To Start an Employee Financial Wellness Program

Starting a financial wellness program doesn't have to be overwhelming if you follow a systematic approach.

1. Assess employee needs through anonymous surveys or feedback sessions to understand their biggest financial concerns, such as budgeting, debt management, or retirement planning.
2. Select program features that directly address these priorities rather than implementing a one-size-fits-all solution.
3. Launch the program with clear communication about enrollment procedures, available resources, and how employees can access support.
4. Track usage and feedback to refine the program over time, monitoring both participation rates and employee satisfaction.

The key is aligning your offerings with employee concerns rather than assuming what they need. Regularly measure outcomes like productivity improvements, retention rates, and other HR metrics to demonstrate the program's value and identify areas for enhancement. Remember, even small adjustments based on employee feedback can significantly boost engagement and effectiveness.