Jan 19, 2008


The significance of employee benefits can best be shown by looking at some frequently quoted data of the U.S. Chamber of Commerce and the Bureau of Labor Statistics. These data come from periodic statistics of the two organizations and are generally updated every two years. It often takes a year or more to collect and tabulate these statistics, and the data shown are for the latest survey years available at the time.

U.S. Chamber of Commerce
In a 1998 study of 619 companies, the United States Chamber of Commerce found that the average payment by employers for employee benefits was equal to 37.2 percent of payroll. Of this figure, 8.4 percent of payroll went for the employer's share of legally required social insurance payments, 8.7 percent for payments to private retirement and savings plans, and 8.5 percent for medical and medically related benefits. The remaining 11.6 percent was for all other types of benefits, with paid vacations being the single most costly item in this category. The study showed substantial variations among business firms, with overall percentages ranging from less than 18 percent to more than 65 percent. Large variations were also shown by industry, with public utilities having the highest percentage (43.6) and communications having the lowest (23.9). Within specific industries, benefit percentages tend to be higher for firms with more than 100 employees than for firms with fewer than 100 employees, and nonmanufacturing firms have higher percentages than manufacturing firms. The percentages also tend to be somewhat higher for hourly employees than they are for salaried employees.

In addition to employer costs, employee payroll deductions for benefits amounted to 13.1 percent of payroll in 1998. The majority of this amount was for Social Security and Medicare taxes and contributions to retirement and savings plans.

The Chamber of Commerce study also shows that employees received an average of $14,655 in benefits in 1998. However, there was a significant range, with one-tenth of employees receiving more than $23,842 and one-tenth receiving $7,028 or less. These variations are the result of company, industry, geographic, and employee differences...


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