In the modern business environment, the information technology (IT) sector is becoming an indispensable factor in almost every business. With the rapid development of technology in the 21st century, the importance of the IT sector is increasing due to the need for digitization and constant market dynamics. Securing a competitive advantage by introducing and developing new technologies and attracting new and retaining existing employees is a growing challenge for IT companies. Benefits, additional award that employers provide to their employees, increase their motivation and satisfaction, and performance of the company itself. With the accession of the Republic of Croatia to the EU in 2013, the competition on the labor market, especially in the IT sector, has increased, and the benefits themselves have become more important. This paper will analyze the application of benefits in small and medium-sized enterprises of the IT sector. Due to the specifics of the sector in question, such as strong competition on the labor market and dynamic work, a special challenge for employers is the proper selection of benefits to attract and retain employees. A mitigating circumstance in small and medium-sized enterprises, due to the smaller number of employees, is the easier selection of benefits that suit an individual employee needs. Such employers can choose exactly those benefits that employees want the most. The thesis thoroughly explains what benefits are and their purpose, while analyzing the benefits that employees have in small and medium-sized companies and investigating how these benefits affect employee satisfaction. Furthermore, it will be shown which are the most common benefits offered to employees in the mentioned sector and how they are used as a tool to maintain loyalty and increase the satisfaction of employees in the IT sector.