GPI 204 – Calculate the average cost (%) of all company paid employee benefits.

Most employees do not know how much their company pays for payroll benefits in their behalf.  This constitutes a long expensive list and should be itemized and made available to all employees to make them realize the real cost of hiring a full time employee.  Make it simple for presentation and use an average salary as a guideline for comparison (salary/year and hourly rate).

Make sure to use an average salary typical of the average plant worker and put a total dollar amount on all of the benefits that are paid in behalf of this average person for the payroll benefit example.

Company paid employee benefits:

1. Vacation pay (use the average pay rate plus a reasonable amount of overtime).
2. Sick pay (use the average annual salary in the plant or office and apply the amount of days allowed in your policy.
3. Jury duty (use the average annual salary and apply the amount of days allowed in your policy).
4. FUTA (federal unemployment insurance, use the company overall salary average and the assigned rate to derive this employer cost).
5. SUTA (state unemployment insurance, use the company overall salary average and assigned rate to derive this employer cost).
6. Workers’ Compensation Insurance (use the overall premium average divided by the number of employees, a mixed rate).
7. Life insurance (use a salary average times the premium of an average-aged worker).
8. Short term disability (use a salary average to select a coverage premium).
9. Long term disability (use a salary average to select a coverage premium).
10. Medical insurance (use a family rate for comparison purposes).
11. Dental insurance (use a family rate).
12. Uniforms and shoes if supplied (use an average).
13. Paid lunchtime and break time (use a salary/hourly average).
14. Pension expense (use a salary average).
15. #401K matching expense (mention vesting period of time and assume fully vested cost).
16. Discounts offered through nearby businesses in association with your company offered to your employees.
17. Training expenses (i.e. machine operators on new equipment, safety training, forklift training, accounting training for bank software).
18. Tuition reimbursement if offered (display a weighted average).

Have this printed out every six months to a year and have copies available for potential new hires, recruiting firms and your HR personnel who visit the colleges and training schools looking to hire new recruits..

Pass these copies out to inquiring workers.  It advertises your firm and lets employees know you are proud of your benefits package.  You also want to get feedback from new potential candidates in order to correct any problems that may keep you from hiring the best candidates that are out in the workforce.