Cost of Employee Benefits
When it comes time for you to seek new employment, you may become fixated on your salary or hourly rate. While this is, of course, important, what you might not realize is that there is quite a lot of value in your employee benefits as well. The cost of employee benefits makes up nearly 32% of your compensation package in most cases, almost none of which is taxable for employees. Read on to find out what that means for both employees and employers.
Your Benefits Have Financial Value
Have you considered the financial value of your benefits? For most employees, the financial value can range anywhere from $5,000 to $30,000 per year for health insurance alone. An average four-person family in America spends about $28,166 per year through a PPO plan, but employers pay for 56% of that, meaning health insurance alone is worth nearly $16,000 for the average family. That doesn't even factor in other benefits, such as paid vacation or a 401(k) plan.
The Value of a Retirement Plan
In fact, let's look at that 401(k) a little more closely in terms of the cost of employee benefits. For most people, the retirement plan is worth between 2% and 6% of the salary. The Society for Human Resource Management says that 42% of companies match their employee contributions into 401(k) plans dollar for dollar. Even those that don't match exactly that have value. An employer-sponsored retirement plan is an excellent way to create a tax-advantaged retirement plan.
Other Types of Benefits
Of course, the value of benefits goes beyond retirement plans and health insurance. Many companies offer employee stock purchase plans, student loan benefits, and tuition reimbursement as well. Stock purchase plans can account for up to 15% of the market value, which can be thousands per year, depending on how much you contribute. Student loan repayment is a growing trend in benefits that has employers helping students pay off a debt to the tune of up to $2,000 per year. Finally, many employers will pay you up to $5,000 per year to go back to school.
These are just some of the major contributors to the cost of employee benefits. For the full cost of your benefits, you must consider other contributions as well. Does your employer offer financial wellness benefits or unemployment insurance? What about FICA contribution or disability insurance? Every benefit adds up to a monetary value that benefits you each year. This is why it's so important to consider your benefits package as y