Jul 21

Benefits cost employers a bundle!

Reading Time: 2 minutes

 

The national average paid out by employers for employee benefits is 39 percent of total payroll costs.

This figure comes from the U.S. Chamber of Commerce, based on a survey of nearly 400 U.S. companies of various sizes, industries and geographic locations.

 

Here are some of the specific figures from the survey:

 

  • One in 10 employers put more than 48 percent of their payroll dollars into benefits.
  • One in 10 employers put less than 23 percent of their payroll dollars into benefits.
  • Larger employers paid more per employee for benefits. For example, employers with 99 or fewer employees provided an average of 32.6 percent of payroll — or $13,064 per employee — in benefits. But employers with 1,000 to 2,499 employees put 39.6 percent of payroll — or $18,910 per employee — into benefits.

The average payroll dollar is broken down like this: 61-cents in wages, 11-cents in medical benefits, 10.9-cents for holidays and vacation, 8.2-cents for legally required payments such as payroll taxes and Workers’ Comp, 8-cents in retirement and savings contributions, and 1-cent for other costs.

 

Here’s what the benefit dollars go for:

  • Nearly 100 percent of surveyed companies provided paid holidays, health insurance, and paid vacation benefits to full-time employees.
  • Retirement programs were offered by 95 percent of surveyed firms.
  • Life insurance was provided by 91 percent of businesses.
  • Sick leave was paid for by 77 percent of firms.
  • Long-term disability coverage was provided by 69 percent of companies, while 59 percent offered short-term disability to full-time employees.


  • Paid holidays were given to part-time employees by 44 percent of businesses.
  • Only 24 percent of firms provided health benefits to part-time employees.

However, “average” percentages can be misleading. Comparing your own company’s benefits costs to a national average is not very helpful.

 

Smart strategy: Do a breakdown of your payroll costs. Calculate how much each item in the employee’s payroll costs. Then share this information with your employees once a year in a report. The more employees know exactly what they receive — and what it costs — the more likely they’ll appreciate the full value of their job.

 

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