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What is the Average Cost of Employee Benefits?

Did you know that the average cost of employee benefits in 2018 is $21,726? Let’s take a closer look at what exactly are employee benefits and how much they cost.

The average worker contributes over 11% of their monthly pay toward health insurance. Budgeting how much money remains for necessities can be tedious. Even after paying taxes and mortgage. Luckily, there are employee benefits you can receive at work beyond monetary compensation.

Cost of Employee Benefits

The cost of employee benefits has different factors that influence them. These include the type of employment and the nature of the business that a company is operating. For example, health insurance covers the majority of the benefit.

The following is a breakdown of the average cost of benefits per employee:

  1. Health insurance: $5,000 per year
  2. Dental insurance: $750 per year
  3. Vision insurance: $300 per year
  4. 401(k) retirement plan: $1,500 per year
  5. Paid vacation days: $500 per year
  6. Paid sick leave: $200 per year

These common benefits add up to an average of $8,950 worth of benefits per employee. These vary depending on the company and the types of benefits offered.

Physical and Mental Health Benefits

The average cost of employee benefits for physical and mental health is about $1,500 per employee. This cost is also covered in the health insurance cost. The average cost of health insurance for a family of four is about $2,700 per year. These also depend on the type of plan, the deducible, and the coinsurance.

Retirement and Pension Benefits

Retirement and pension benefits make up the lion’s share of employee benefits costs. These benefits account for an average of 70 percent of its total cost.

As stated by the Society for Human Resource Management, in 2017, the average cost of retirement and pension benefits was $1,415 per employee. This represents a significant increase from previous years. This is likely due in part to the increasing costs of meeting pension obligations.

Employment Insurance and Leave Benefits

The average cost of employee benefits inclusive of employment insurance and leave benefits also make up a large percentage of an employee’s payroll costs. So it is important for companies to consider these costs when setting salaries.

Employment insurance and leave benefits for employees take up between 15 and 20 percent of an employee’s total compensation package. This cost is generally higher for employees who work in higher-wage industries.

Estate Planning Benefits

Estate planning benefits help employees plan for their future and protect their assets in the event of their death. The cost of these can be high, but they are worth the investment for employees and their families.

The average cost is generally around 1-2% of the total estate for estate planning benefits. This can be a significant expense for many families. Yet, it is important to remember that these benefits secure you and your loved ones for the future.

Work-Life Balance Benefits

The work-life balance programs help in boosting the morale of employees in companies. Work-life balance benefits allow for situations that understand employees on a humane level.

These include flexible scheduling, telecommuting, and on-site child care. These benefits let employees feel less stressed and more productive. They are also great long-term investments.

Companies have varying capabilities in compensating their employees with these types of benefits and it’s important to note that the cost of employee benefits makes up a significant portion of company costs.

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