That's an excellent point.
In my prior work in a senior corporate management position, I had the pleasure of managing an office of 50-60 people that shared an unusual combination of characteristics:
1. They were somewhat underpaid for their profession.
2. We had the lowest turnover of any office in the company during the 5+ years I was there.
Item #1 was a function of the competitive nature of our work and the long-term contracts we had that limited how much we could pay most of the staff. I went out of my way to compensate them in ways that didn't show up as payroll-related expenses -- I offered flex-time and work-from-home options before they became a common thing during COVID, let middle managers and team leaders take their employees out to work on the company's dime, let them take an extra few days at conferences for sightseeing/tourism, etc.
We were still very profitable even with these "hidden" expenses because these were dedicated, loyal, and highly productive employees.
Non-taxable benefits are worth a pile in a system set up to tax the snot out of everything in sight.
When in Zanzibar, roll with the rules of Zanzibar.
(I may be slightly off in your official local—but it is someplace with not as good a rep as ALberta, but better than what can be found between NYC and Philly).
... let middle managers and team leaders take their employees out to work lunch on the company's dime ...