Employers everywhere will agree, employee fringe benefits carry a very high cost. In addition to wages or base salary, there are many additional expenses incurred by employers. I’m well aware of this, because I see the bills and I see the total cost of staff compensation on my financial statement – but I realized years ago that my staff members were generally unaware of the real value of the perks we provide.
To gently educate our staff, I devised an employee compensation form, which we distribute at the end of the calendar year with the employee’s W-2 wage and tax form. This form lists every employment expense incurred for the individual during the year. We either keep our own records of these items or our CPA provides them. Eye care benefits, for example, are tracked by each employee filling out an “employee usual and customary fee slip” whenever they receive free eye care or buy optical materials at cost.
I’ve provided my form below as a sample. Determine if you provide some additional benefits – and remove the line completely if you don’t provide a listed benefit.
You’ll notice that some of the items listed are not really benefits – but are government mandated payments – such as social security matching and unemployment insurance. I list them anyway because this is an educational piece and I consider those payments part of the employee’s true compensation.
The TOTAL COMPENSATION value tells the staff that they are actually earning much more than they thought. For hourly employees, we recalculate their effective hourly pay rate based on this total compensation dollar amount.
(Vacation and paid holidays included here)
|Profit sharing / 401K contribution||_____________|
|Health insurance premiums||_____________|
|Eye care benefits||_____________|
|Continuing education fees||_____________|
|Social Security matching||_____________|
|Total number of hours worked||_____________|
|Effective hourly rate||_____________|