**Purpose of Employee Benefit Trust in Business** Then what is employee benefit trust and why would any business want to establish such a trust? Employee benefit trust refers to a trust fund that is established with the purpose of holding funds that will later be used for rewarding employees in the capacity of incentive programs or share schemes. You may be asking yourself how does an employee trust work and here it is good to note that an employee benefit trust normally has provisions on how its funds are to be distributed to eligible employees. [EBT what does it mean](https://accountance.net/employee-benefit-trust/) is simply a shorter version of the word.