What Should Be Included in an Employee Handbook: A Guide

ByDanica Jovic
March 21,2023

An employee handbook is perhaps the single most important document in any company. In addition to communicating your company’s policies, it’s an essential part of onboarding new employees and conveying the core values of your business.   

But in spite of its importance, many small business owners don’t actually have a company handbook. Others don’t recognize its value until something goes wrong. That’s why it’s always better to have one as soon as you start your business. This is the best way to set clear expectations for your employees and outline your legal obligations and their rights. Our guide will tell you what should be included in an employee handbook and how to create one. 

What Is an Employee Handbook?

An employee handbook is also referred to as an employee or company policy manual or a staff handbook. It outlines your company’s mission and culture while informing employees of the legal framework governing their employment. The handbook also includes various other components such as your company’s background information, procedures and policies, working conditions, and employee rights.

This document should be made available to each employee as soon as they are hired. The new employees should also be asked to provide a written acknowledgment that they received the handbook. 

What Topics Should Be Included in an Employee Handbook?

As an employer, you aren’t legally required to provide employees with a policy manual or a handbook. However, this is a highly beneficial communication resource between you and your employees, which is why many small business owners choose to create one. While insurance policies for small businesses protect you from professional mistakes, a written format of the company rules and policies can go a long way in shielding you from discrimination and harassment claims. 

But an employee handbook is not only about the rules and policies. It should also set the tone of the company’s culture and help create a healthy and positive work environment. This is why you should finish writing an employee handbook before you turn to job posting sites and begin the onboarding process. This approach informs employees about everything that’s expected of them before they start working. 

An employee policy handbook should cover several topics, including information about your company (history, values, mission), in-house rules (mobile phone use, for example), mandatory policies (equal employment opportunity and PTO), and human resources information.

The Main Components of an Employee Handbook for Small Business

There is no shortage of templates and employee handbook examples online. Most include the aforementioned key components and additional policies for different business organizations. Below is a list of the most common features in every company policy handbook, including some of the most important small business policies and procedures.


Start by introducing employees to your company history and background information. This section can have a welcome note from the CEO, which introduces the company’s team and explains its mission and core values. This is the most flexible part of a handbook and can include everything from the purpose of the handbook to a contractual disclaimer. 

A widely accepted employee handbook definition requires the introduction to explain how your business is organized, who are the owners/CEOs, and where the business is incorporated. These sorts of details are useful to have on hand as most companies that provide business incorporation services, like Northwest Registered Agent, require you to provide this information. 


Once you’ve outlined your company’s mission and vision, it’s time to explain how your company works. Start with the hiring and onboarding section, where your employees can get informed about the company’s structure, confidentiality agreement (nondisclosure agreement or NDA), and conflict of interest procedures. 

The most basic employee handbook information should also assure your staff that the company guarantees equal employment opportunities for all candidates. EEOC protects candidates against age, race, gender, or any other form of discrimination. 

Code of conduct

This section tells employees how the management expects them to behave, as well as the measures taken by the company against those who violate the rules. It’s one of the most important components on the long list of employment policies and procedures that protect both the company and its workers. Even the most flexible companies have boundaries, and it’s important that these are clearly outlined for everyone’s sake. 

The code of conduct section can include policies regulated by law, like the anti-harassment policy, but it can also outline other small business rules and regulations for employees, like the dress code. 

Payment and compensation 

For employees, this section will probably be among the most important ones, so you should make it clear and comprehensive. This part of an employee manual includes information about the payroll schedule, salary, and bonuses. It should also provide a simple explanation regarding taxes and deductions. While you can use software for calculating and filing taxes, the employee handbook should explain the main payroll deductions (federal, state, and local taxes, for example). 


When creating an employee manual, make sure you include all the perks. The section consists of the various benefits that the company offers to its employees - from sick leave and vacation time to health insurance, retirement plans, and career development. 

It goes without saying that this is a crucial section of your company’s employee handbook for every member of your team. In addition to the most common benefits such as paid time off and health care plans, some businesses include free courses, team-building exercises, office meals, and even unemployment insurance. Your workers will want to see their list of benefits spelled out, and they’ll carefully review these employee handbook contents. 

Employee termination procedure 

If your employee finds a new job or you need to lay someone off, there are procedures the company needs to follow. You should also inform your employees what happens when someone has to leave the team. The standard offboarding procedures include information about the last paycheck delivery and unemployment insurance. The policy can also explain how the last conversation with the company’s HR looks like. 

Employee acknowledgment 

This page should be signed by your employee after reading the handbook. It confirms that the employee understands your company’s rules and policies. 

How to make an employee handbook?

By now, we’ve established that an employee handbook is an important ingredient in any business organization. Yet many businesses decide to bypass this step when setting up their operation. Some business owners find it too difficult and time-consuming.

Here’s the good news. If creating a handbook for your small business is not your cup of tea, you can always outsource this task. Just like there are companies that provide bookkeeping services, there are those that can help you create your handbook from scratch.

Both professional HR consulting companies and law firms offer this type of service. With professional services, you’ll get something that’s customized to fit your business needs, but you don’t need to know how to write an employee handbook. These professionals will take care of everything, from incorporating the federal, state, and local policies into the handbook to writing sections that reflect your company’s culture in the best way possible. 

If you decide to go at it alone, you’ll need to conduct thorough research to identify the policies that need to be included. But this option gives you a chance to be creative. No one knows what kind of atmosphere you want to create in your company better than you. Think about the values you wish to promote and write them down. 

Alternatively, you can use online templates and forms for free to create a small business handbook. Adjust them to fit your needs, check if all mandatory policies are included, and write your expectations and rules. When you’re done, make sure the document is reviewed by legal counsel. 

Tips and tricks for writing an employee handbook:

If you decide to author a handbook on your own, here are some useful tricks that will help you along the way. 

Set the tone 

Make sure that you use a friendly voice when writing a handbook. Of course, you want to be sure that your employees will take it seriously, but it doesn’t necessarily mean that you have to come off as authoritative. You can make an employee handbook by using encouraging and affirmative tones that are as effective as those written from the “don’t perspective.”

Design your handbook

The way you present your handbook is also important. Whether you create an online handbook or a paper copy, make sure it introduces new employees to your company’s colors and logo.

Include images

You can take things a step further when personalizing your handbook. Include photos of your office and team members to give off a more positive and friendly vibe.

What not to include in an employee handbook?

An employee handbook should have all “boring” mandatory policies, but you shouldn’t go into too much detail. A handbook should offer explanations that your employees can understand. This is especially important when it comes to things like health insurance and other benefits. However, for detailed information, there should be links to government websites where your staff can find additional information. 

It’s also important not to confuse an employee handbook with other manuals. While trying to figure out what to include in an employee handbook, some company owners arrive at the conclusion that it’s the same thing as an HR manual. This is incorrect. These are two completely separate documents. 

A handbook is a document for your employees that should be given to them when they start working for your company. Its purpose is to set expectations and communicate policies. 

An HR manual is for you and your human resources team. Its purpose is to explain the process behind your company’s policies. If someone violates any of the policies, your HR will know how to deal with it, thanks to the HR manual.


Frequently Asked Questions
What should be included in a handbook?

An employee handbook contains guidelines and policies that should help an employee fit into a business organization. A good employee handbook includes two key components. The first outlines the rules regarding the company’s in-house policies, like dress code, mobile phone usage, etc. The second one includes legal mandates, like health care policy, benefits, and PTO. There should also be a section explaining the company’s values, vision, and mission.  

How much is an employee handbook?

It depends on who creates it. If you decide to hire a professional to help you make your company handbook, the price ranges between $1,500 and $5,000. If you decide to create an employee handbook on your own, you can save some money, but it will cost you time. And if you are not sure which policies are mandatory for a state your company operates in, you’ll probably need to ask for legal advice. The ideal method is combining the two options. Get templates of employee policies online and create your handbook on your own, and then forward it to a legal service for review. It’s more affordable than paying for the complete service while ensuring that your handbook includes all the mandatory policies. 

How do I create a Small Business Handbook?

Although it might seem complicated, creating a handbook on your own can be fun. Our guide on what should be included in an employee handbook tells you everything you need to know before getting started.

Do small businesses have to have an employee handbook?

Legally, you don’t need to have a standard employee handbook in your company. However, you are legally required to inform your employees about their rights and benefits, like working hours, anti-discrimination and harassment policies, and more. Some business owners don’t have a handbook because it seems too time-consuming and expensive for them. But this is the best way to make sure that all your employees know what’s expected of them and what their rights are.

About the author

Danica’s greatest passion is writing. From small businesses, tech, and digital marketing, to academic folklore analysis, movie reviews, and anthropology — she’s done it all. A literature major with a passion for business, software, and fun new gadgets, she has turned her writing craft into a profitable blogging business. When she’s not writing for SmallBizGenius, Danica enjoys hiking, trying to perfect her burger-making skills, and dreaming about vacations in Greece.

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