The Real Cost of Benefits

When employees look at their paycheck stubs, they probably only focus on their wages. As an employer, you know there’s much more to the picture. To find out how the benefit and wage package you provide stacks up with the national average, check the quarterly U.S. Bureau of Labor Statistics’ report: “Employer Costs for Employee Compensation.”

The most recent report reveals that costs for total employee compensation averaged $35.28 per hour. Of that amount $24.10 was for salary and $11.18 was benefits.

Averages were based on compensation costs for 15 areas ranging from $28.20 per hour for the Miami area to $53.61 for San Francisco.

Health insurance costs average about $2.50 per hour, although health insurance benefits for union workers are higher at $6.09 per hour.

According to Joe Hadzima, a senior lecturer for the MIT Sloan School of Management, typical costs for an employee making a $50,000 annual salary could total $62,500 to $70,000, when you include employment taxes and benefits. The estimate includes $150 in life insurance; $2,000 to $3,000 for single health insurance or $6,000 to $7,200 for a family; $250 for long-term disability insurance; and $240-$650 for dental plans. This doesn’t include 401(k) savings plans.

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