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Benchmark: Employer Costs for Employee Compensation
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\nEmployee compensation packages usually contain at least two components:
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\nbase salary or hourly wage; and
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\ngroup benefits.
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\nBase salary depends on competitive considerations such as the available talent pool, the role of bonuses, and the company’s stated philosophy to pay at a specified percentile of the market salary.
\nGroup benefits may be in the form of protective benefits \u2014 health care or prepaid legal services \u2014 or in the form of profit-sharing or gainsharing.
\nRegardless of the particular benefits that comprise a compensation package, a big concern for most employers is paying for it. Although some employees are required to contribute to the cost of various benefits, the bulk of the compensation package is often provided by the employer.
\nBLS survey.\xa0The U.S. Bureau of Labor Statistics (BLS) publishes a quarterly\xa0Employer Costs for Employee Compensation\xa0survey. The survey measures the average cost per employee hour worked that employers pay for wages, salaries, and benefits. Data is collected for the pay period including the 12th day of the survey months of March, June, September and December. Results are issued approximately three months after the month of reference.
\nQuarterly results for March 2018 are as follows:
\nSurvey description
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\nSurvey is conducted quarterly by the BLS. The payroll period that includes March 12, 2018, is the reference period.
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\nSurvey release date: June 8, 2018.
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\nData from both private industry and state and local government is included. Self-employed, farm, household, and federal government workers are not included.
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\nCost levels are based on a sample of approximately 27,300 occupations within approximately 6,600 private-industry establishments and about 8,000 occupations within approximately 1,400 state and local government establishments.
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\nSummary of survey results
\nCompensation costs for civilian workers
\nIn March 2018, employer costs for employee compensation for civilian workers (private industry and state and local government) in the United States averaged $36.32 per hour worked. Wages and salaries, which averaged $24.77 per hour, accounted for 68.2 percent of these costs, while benefits, which averaged $11.55 per hour, accounted for the remaining 31.8 percent.
\nLegally required benefits (\xa0e.g.,\xa0Social Security, Medicare, workers’ compensation, unemployment insurance) averaged $2.66 per hour (7.3 percent of total compensation). Other benefit categories and their average cost per hour worked were:
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\nlife, health and disability insurance: $3.18 (8.8 percent of total compensation);
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\npaid leave: $2.58 (7.1 percent of total compensation);
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\nretirement and savings: $1.92 (5.3 percent of total compensation); and
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\nsupplemental pay: $1.20 (3.3 percent of total compensation).
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\nCompensation costs in private industry
\nPrivate-industry employers spent an average of $34.17 per hour worked for total employee compensation. Wages and salaries, which averaged $23.76 per hour, accounted for 69.5 percent of these costs, while benefits, which averaged $10.41 per hour, accounted for the remaining 30.5 percent.
\nLegally required benefits averaged $2.65 per hour (7.8 percent of total compensation). Other benefit categories and their average cost per hour worked were:
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\nlife, health and disability insurance: $2.74 (8.0 percent of total compensation);
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\npaid leave: $2.40 (7.0 percent of total compensation);
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\nretirement and savings: $1.30 (3.8 percent of total compensation); and
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