How Much is Taco Tuesday Really Worth?
Salary and wages are historically the biggest factor in compensation. But benefits are a significant portion, as well.
As of September 2022, the U.S. Dept. of Bureau of Labor Statistics (BLS) reported that the total compensation costs employers pay employees breaks down to roughly 70% salary and 30% benefits.
Despite the sizable investment employers make in their workers, many do not have a full picture of (or appreciation for) the entire compensation package they receive. And that can lead to unnecessary turnover and higher recruiting and retention costs for a company.
In LIMRA’s 2022 BEAT Study: Benefits and Employee Attitude Tracker:
- Almost 2/3 of U.S. employees say benefits, beyond salary, are important for staying with an employer.
- 3 in 10 say they’re not even sure if their employer offers the benefits they want the most, like health, dental, and flexible work arrangements!
Help Employees and Recruits Understand the Total Value of their Compensation Package:
A total compensation statement can be a useful tool to make employees aware of how much they receive every year… beyond salary and how much you’re investing in them. A typical total compensation statement may include information about:
- Financial benefits, like salary
- Health benefits, like medical insurance
- Nice-to-have perks, like free meals, parking, or company-paid gym memberships
As helpful as they are, however, total compensation statements can be time-consuming to put together and update every year. To make that task easier, use the following worksheet as a sample to create one that best reflects your compensation package. By documenting the value of each component in your plan and adding them up at the end, you can help employees realize their true compensation at your organization.
Key Components of Your Total Compensation Package
- Base Salary:
The annual amount you pay an employee
The amount of any initial sign-on, retention or annual bonuses you provide employee.
The amount an employee earns on the sale of products or services
- Health Insurance:
How much you contribute for single coverage. (The average amount employers contribute for each of their employees is approximately $6,440.)
- Health Savings Account:
How much you contribute to offset the amount employees have to pay out-of-pocket to meet health plan deductibles. (According to recent estimates, the average contribution was $600.)
- Mental Health Benefits/Employee Assistance Program (EAP)
How much you pay per employee per year for free access to mental health benefits and/or dollar value of free virtual sessions.
- Dental/ Vision Care
How much, if any, you contribute for single coverage.
How much, if any, you contribute for short- or long-term disability coverage.
- Retirement Plan Match
How much you will contribute to an employee’s retirement plan (The average employer match is about 3.5% of annual salary.)
- Life Insurance
The annual cost you pay to provide each employee with a free amount of life insurance.
- Company Stock
How much of a stock grant/bonus, if any, you provide to new hires and employees.
- Student Loan Repayment
How much you contribute to help employees repay student loans. (The CARES Act allows employers to pay up to $5,250 tax-free per employee.)
- Cell Phone and Other Equipment
How much of an allowance you pay every year toward an employee’s cell phone bills and/or other equipment, such as laptop, computer, printer, etc.
- Company Car
How much of an allowance you pay every year to reimburse an employee for using his/her car for business.
The annual amount of PTO you offer employees: e.g., daily wage x # of days off per year
- Holidays and Personal Days
The number of days off/holidays you offer employees: e.g., daily wage x # of days per year.
- Company-Paid Fitness Offerings
How much you pay toward a gym membership for employees to maintain physical fitness.
- Complimentary Meals
How much of a stipend or free lunch (e.g., Taco Tuesdays) you offer employees every year.
- Free Marking and/or Commuter Fares
How much you pay toward employee parking or commuter fares on public transportation.
- Remote work arrangement
- Flexible work schedules
COMPENSATION GRAND TOTAL:
(Add all total lines 1-4 here.)
Our employee benefits team can help you put together a benefits strategy that can help both employees and recruits appreciate the total compensation package you offer and motivate them to join (and stay with) your organization.
Contact a member of our team today to talk about your needs.
This material has been prepared for informational purposes only. BRP Group, Inc. and its affiliates, do not provide tax, legal or accounting advice. Please consult with your own tax, legal or accounting professionals before engaging in any transaction.