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Guide for HR teams

Employee wellness incentives: what to offer and what to check

A good incentive rewards a small action soon after it happens and lets people choose what they get. This guide covers the common incentive types, how Affili-Fit rewards work, and the US rules on limits and taxes.

Talk to our wellness team Updated November 2026
9:41
Affili-Fit My Day screen showing daily goals and reward points

Types of wellness incentives

  • Points for daily goals, redeemed for rewards. Small, frequent and easy to understand.
  • Time off, such as an extra half day after a month of goals. Popular and cheap to offer, but harder to track.
  • Health plan premium discounts. Common in larger employers and covered by the federal limits below.
  • Gift cards and cash. Simple, but taxable as wages in the US.
  • Team prizes, like a lunch when a department hits a shared step goal.
  • Recognition, such as a shout-out in an all-hands meeting.

Rewards from local businesses

Affili-Fit uses points. Employees complete daily goals in the app, such as hitting a step count, drinking enough water or logging a meal, and each goal adds points to their rewards wallet. They spend the points on products and experiences from local businesses that partner with Affili-Fit.

Offers are matched to each member's account and organization. Local shops, cafes and studios can join as rewards partnersand choose what they offer and what it takes to unlock. For the member's side of this, see apps that pay you to work out.

US rules to check first

This is general information, not legal advice. Talk to your benefits counsel before you launch a program with financial rewards.

Participatory or health-contingent

Under HIPAA and the Affordable Care Act, a participatory program rewards taking part, such as joining a challenge or attending a class. A health-contingent program rewards reaching a result, such as a step count or a biometric target. Health-contingent programs tied to a group health plan must offer a reasonable alternative to anyone who can't meet the standard for medical reasons.

Reward limits

Health-contingent rewards are capped at 30% of the total cost of self-only coverage, or 50% for programs that target tobacco use. Participatory programs are not capped by these rules.

Taxes

The IRS treats cash and gift cards as taxable wages regardless of value, so they go through payroll. Some small non-cash items may count as a de minimis benefit and stay untaxed.

How to design an incentive people care about

  • Reward small daily actions rather than a single result months away.
  • Pay out soon after the effort, while people still feel it.
  • Let people choose the reward. A coffee means more to some people than a voucher they won't use.
  • Make sure remote staff and people with different fitness levels can earn the same rewards.
  • Pair the incentive with something to do. Our employee wellness program ideas list twelve.
FAQ

Common questions

What are good incentives for an employee wellness program?

Points for small daily goals that people redeem for rewards they choose, extra time off, team prizes, discounts on health plan premiums, and recognition. Rewards that arrive soon after the effort and let people pick what they get tend to motivate more than one large prize at the end of the year.

Are employee wellness incentives taxable?

In the US, the IRS treats cash and cash equivalents such as gift cards as taxable wages, whatever the amount. Some low-value items may not be. Check with your payroll or benefits adviser before choosing a reward type.

How much can an employer offer as a wellness incentive?

For health-contingent programs tied to a group health plan, federal rules cap the reward at 30% of the total cost of self-only coverage, or 50% for programs aimed at tobacco use. Participatory programs, which reward taking part rather than reaching a health result, have no such cap. This is general information, not legal advice.

Do points-based wellness incentives work for remote teams?

Yes, if the goals can be met anywhere. Steps, water, logging meals and finishing a workout all work from home. In Affili-Fit, employees earn points for daily goals on iOS, Android or the web and redeem them in their rewards wallet.

How does Affili-Fit handle wellness rewards?

Employees earn points by completing daily goals in the app. They redeem the points in their rewards wallet for products and experiences from local businesses that partner with Affili-Fit. Offers are matched to the member's account and organization.

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