Benefits for Tech Startups: What Works in Canadian Tech

You're competing for talent against companies that offer catered lunches, unlimited PTO, and wellness stipends. But you're also watching your runway and can't throw money at every shiny perk.

The good news: thoughtful benefits beat expensive benefits. Here's what's actually working in Canadian tech—and what's a waste of money.

The Tech Talent Reality in Canada

Canadian tech employees have options. They can work for US companies remotely (often at US salaries), join well-funded startups, or land at established tech giants. Your benefits package is part of how you compete.

But here's what most founders miss: tech workers don't want more stuff—they want more flexibility.

The ping pong table and beer fridge are nice. But they don't move the needle on retention the way personalized benefits do.

What Tech Employees Actually Want

Based on surveys of Canadian tech workers, here's what matters most:

1. Flexibility in how they work (remote, hybrid, async)
2. Health coverage that fits their life (not generic group insurance)
3. Mental health support (therapy, not just an EAP number)
4. Learning and development budget
5. Home office support (equipment, internet, ergonomics)

Notice what's not on the list: dental coverage for orthodontics, life insurance, or the traditional benefits package designed for a different generation.

The Modern Tech Benefits Stack

Here's a framework that works for Series A through growth stage:

Tier 1: Foundation (Everyone needs these)

Health Spending Account (HSA):

• $1,500-3,000 per employee annually
• Covers dental, vision, prescriptions, therapy, and more
• Tax-free for employees, deductible for you

Remote work stipend or LSA:

• $500-1,500 annually for home office setup
• Or ongoing monthly amount for co-working, internet, etc.
• Can be structured as taxable allowance or LSA

Mental health coverage:

• Dedicated allocation or included in HSA
• Consider adding a platform like Dialogue or Inkblot
• Make it easy to access, not bureaucratic

Tier 2: Competitive (Differentiate from average)

Learning & development:

• $1,000-2,500 annual budget for courses, conferences, books
• Trust employees to choose what's valuable
• Don't require manager approval for small purchases

Wellness LSA:

• Gym memberships, fitness classes, sports equipment
• Meditation apps, wellness retreats
• Let employees define what wellness means to them

Extended health riders:

• Fertility coverage (increasingly important)
• Gender-affirming care
• Paramedical coverage above HSA limits

Tier 3: Premium (For when you're scaling)

Sabbaticals:

• 4-6 weeks paid after 4-5 years
• Increasingly common at growth-stage startups
• Strong retention signal

Family benefits:

• Parental leave top-up (beyond EI)
• Childcare support or family LSA
• Pet benefits (yes, really)

Equity refresh:

• Regular grants, not just at hire
• Retention tool for key employees

What NOT to Spend Money On

Traditional group insurance (at early stage): You're paying premiums for coverage employees don't need or use. An HSA gives them the flexibility to use the same dollars on what matters to them.

Overly complex benefits platforms: Your 25-person startup doesn't need a platform designed for 10,000 employees. Simple beats comprehensive.

Perks that require office presence: Catered lunches and on-site gyms don't work when 60% of your team is remote. Convert that budget to remote-friendly benefits.

Life insurance and disability (heavy coverage): Basic coverage is fine. But early-stage employees often prefer the dollars spent elsewhere. Survey before assuming.

Structuring Benefits at Each Stage

Pre-seed / Seed (5-20 employees)

Budget reality: Every dollar matters Approach: Simple HSA + home office stipend

• HSA: $1,500/employee/year
• Home office: $1,000 one-time or $100/month
• Total cost: ~$250/month per employee

Platform choice: Modern SaaS provider with low minimums

Series A (20-50 employees)

Budget reality: Building culture, competing for talent Approach: HSA + LSA + learning budget

• HSA: $2,000/employee/year
• LSA (wellness + professional development): $1,500/employee/year
• Mental health add-on (telemedicine): $15-20/employee/month

Platform choice: Flexible platform that scales with you

Series B+ (50-200 employees)

Budget reality: Retention becomes critical, leadership wants "real" benefits Approach: Full stack with optionality

• HSA: $2,500-3,000/employee/year
• LSA: $2,000/employee/year with multiple categories
• Parental leave top-up
• Consider catastrophic insurance layer
• Equity refresh program

Platform choice: May need combination (HSA/LSA platform + insurance for specific coverage)

The Conversation with Your Board

If investors or board members push back on benefits spend:

Frame it as retention ROI:

• Replacing a developer costs 1.5-2x their salary
• Benefits that improve retention by even 5% pay for themselves
• Survey data shows benefits as top-3 factor in job decisions

Show the tax efficiency:

• HSA dollars are worth 30-40% more than equivalent salary
• LSA for equipment is more efficient than expensing
• Benefits spend is fully deductible

Compare to market:

• "Companies competing for our talent offer X"
• Use data from Glassdoor, Levels.fyi, or tech compensation surveys

Real Examples from Canadian Tech

A B2B SaaS company (45 employees, Toronto):

• $2,500 HSA + $1,000 wellness LSA
• $2,000 annual learning budget
• Dialogue for telemedicine
• Remote-first with quarterly in-person gatherings
• Total benefits cost: ~$400/employee/month

A fintech startup (30 employees, Montreal):

• $2,000 HSA with family coverage option
• $150/month remote work stipend
• Unlimited PTO with minimum 3 weeks enforced
• Mental health platform subscription for all
• Total benefits cost: ~$350/employee/month

A dev tools company (20 employees, Vancouver):

• $3,000 flexible spending (employee allocates between HSA/LSA)
• Conference attendance budget (2 per year)
• Home office setup: $2,000 one-time
• 4-week sabbatical at 4 years
• Total benefits cost: ~$450/employee/month (higher allocation, lower headcount)

Implementation Tips

Start simple, add later: Don't build a complex benefits stack before you have 20 employees. Start with HSA + remote stipend, then add based on employee feedback.

Survey before you build: Ask what employees actually want. You might be surprised—some teams want fitness benefits, others want childcare support.

Communicate clearly: Half the value of benefits is employees knowing they exist. Send quarterly reminders about what's available.

Make it easy: Choose platforms that don't require HR to manually process everything. Self-service is essential.

Benchmark annually: Compensation and benefits expectations shift. Review what competitors offer each year.

The Bottom Line

Tech startups win talent by offering flexibility, not bureaucracy. A well-designed HSA and LSA package often beats traditional group insurance because:

• Employees use benefits they choose, not benefits chosen for them
• You pay for actual usage, not premiums on unused coverage
• Modern platforms are simpler for HR and employees
• The same dollars go further

Your benefits package should feel like your product: thoughtful, modern, and built for the people actually using it.

Tedy is built for tech companies who want flexibility without complexity. Set up HSA and LSA benefits in days, not months. [See how other startups use Tedy →]

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