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Job A: With a $30,000 salary and no annual cost for health insurance, your net salary is $30,000. Job B: With a $32,000 salary and your annual cost for health insurance at $2,400 ($200/month times 12 months), your net salary is $29,600 ($32,000 minus $2,400).
Calculating the benefit load the ratio of perks to salary received by an employee helps a business effectively plan. Find the benefit load by adding the total annual costs of all employees' perks and divide it by all employees' annual salaries to determine a ratio that ratio is your company's benefits load.
Make a list of all non-pay benefits offered by the company in your compensation plan. Calculate the dollar value of your compensation package outside regular pay by multiplying your hourly pay by the number of hours contained in the compensation package.
Total Compensation Per Employee If you divide total annual compensation by 2080 (the total annual hours of a 40 hour/week employee), you arrive at their total hourly compensation. This will reveal the true cost of an employee per hour (($50k annual salary + $20k annual fringe benefits)/2080 = $33.65/hour total comp).
You can also get basic benefit estimates by calling the Social Security Administration at 800-772-1213. But remember, no matter where you get the numbers, they are estimates, not promises.
Modern employees have come to expect an average of 30.4 percent of their compensation to be in the form of benefits.
The company includes benefits as part of overall compensation. According to Pruitt, “Your base salary is the combination of your benefits plus your base salary. However, more times than not, benefits will be counted as a certain portion of your overall compensation package.”
Wages and salaries account for 69.6 percent of employee expense. The remaining 30.4 percent comes from benefits. That means that a little less than one third of your employee expenses are benefits such as health insurance, and these costs should be factored in when you are considering adding employees.
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