Benefits Calculator Frequently Asked Questions
What is a Benefits Calculator and how it is different between base salary & total compensation?
Benefits calculator help employee combine salary and benefits to calculate total compensation cost. When calculating salary costs for your employer pays, it is critical to include the costs of benefits in addition to the base pay rate for accurate costing in the employee benefits calculator. The Base salary is just one part of employees' compensation. The Total Compensation Calculator is used to estimate the pay and benefits which make up the total compensation package for a given position. Additional monetary rewards, like salary bonuses and commissions are also part of it. Company-paid time off, like vacation days, sick days, and personal days are also valuable types of compensation. Base salary and total compensation are two very different ways of measuring what your employees cost you.
To use the benefits calculator to get your total compensation package results, types of benefits could include bonus, Social Security, 401k/403b, Disability, Healthcare, Pension, paid Time off. The base salary is only one component of total compensation. Total compensation will include the dollar value of any or all benefits that you pay for your employees.
How to use the benefits calculator tool to evaluate levels of total compensation paid by employers?
Our benefits calculator could help employees to compare employer pays with industry average cost. Input your employer pays in benefits cost in current employment and select industry from the benefits calculator tool to get your total compensation comparison. Total compensation is the combination of salaries, wages, and benefits that employees receive in exchange for them doing a particular job. When the benefits calculator uses to evaluate job salary, there may get pay different based on the company industry divided. Every company has its own employment costs calculator to calculate how much spend on their salary pay based on job title, job description, and responsivity.
Learn more about benefits types used in benefits calculator
The social security benefits in benefits calculator is a complicated benefit program sponsored by the U.S. federal government. Often noted as FICA (Federal Insurance Contribution Act) on your paystub, Social Security covers three benefits: disability, retirement, and Medicare. The FICA taxes you pay out of your paycheck and your employer's matching payment help fund these three programs.
The Social Security tax is a flat rate of 10.4 percent, a smaller portion of which is paid by employees and a larger portion by employers. In other words, for the year 2012, the employee pays 4.2 percent of the first $110,100 of a worker's annual pay while the employer pays 6.2 percent of the first $110,100 of a worker's annual pay. Medicare cost is an additional 1.45 percent on all payments, which is paid by both employees and employers. Altogether, if your pay is below the Social Security Taxable Wage Base ($110,100 in 2012), you pay 5.65 percent of your payroll income to FICA taxes.
The 401K/403b benefits in benefits calculator of the Internal Revenue Code allow employees to contribute to retirement plans. This code section has now become the de facto common name of a specific type of retirement plan. These tax-deferred saving plans allow employees to contribute by deferring compensation; these contributions may accumulate interest until disbursements are made. The interest and often the contributions are tax-deferred.
Nonprofit organizations have similar plans known as 403(b)s or TIAA-CREF plans.
Employers often make additional contributions to these retirement plans. Employer contributions often match some or all of the employee's contributions. Employer matching is usually between 25 cents and a dollar for each dollar the employee contributes to the retirement account, up to a preset limit.
The disability benefits in the benefits calculator is Disability insurance. Some employers offer short-term and long-term disability insurance (STD and LTD) to eligible employees. If you are away from work for an extended period due to an injury or a maternity leave, you will receive partial income through your employer's disability insurance programs.
Short-term disability coverage usually does not begin until an eligible employee has been out of work for five to ten consecutive days. A typical plan might pay a disabled employee 80 to 100 percent of base salary for the first 10 to 30 days away from work, then 50-75 percent thereafter. STD normally covers a maximum of 180 days.
Long-term disability policies usually pay benefits for a few years, up until the age of 65 in some cases. Coverage usually begins after the short-term disability coverage period ends.
Because the company often pays the entire premium or pays the premium up to a certain amount of coverage, it is important to add disability insurance when calculating the value of your total compensation package.
The healthcare benefits in benefits calculator is perhaps one of the most important benefits companies offer employees through subsidies. Typical coverage includes medical insurance and dental insurance. If your company is large and well established, your health benefits may also include vision care, prescription drug benefits, and counseling services.
Whatever the plan - individual, individual plus one, or family coverage in an HMO, PPO, or indemnity plan - employers often pay a significant portion of the costs. You usually still pay something for healthcare coverage, but it is a small amount compared to what your employer pays.
The company's contribution reported in the Salary Wizard is based on what a typical employee receives. Salary.com acknowledges that users have different healthcare plans - individual, individual plus one, or family coverage. The Salary Wizard uses an average number somewhere between the costs for an individual and the costs of family coverage.
The Pension benefits in benefits calculator is a retirement plan that pays a fixed monthly amount each year during retirement, like an annuity. The Employee Retirement Income Security Act of 1974 (ERISA) does not require employers to provide pension plans but does set the minimum standards for those employers who offer pension plans. Companies pay a specified amount in benefit to employees, otherwise known as a defined benefits plan. The amount is calculated with a formula that may include salary, years of service, and a fixed percentage. Most pension plans allow employees to start claiming the benefits at age 65. A pension plan offers retired employees stability because the benefits are defined by a formula, rather than being subject to investment performance risks as in a 401(k) plan.
Because your employer probably pays the full cost of your pension plan (if you have one), pension plan benefits are an important component of the total compensation package. Your Summary Plan Descriptions (SPDs) or the plan document will tell you how much pension you accrue for your service.
The paid time off benefits in the benefits calculator is offer paid time off in the form of vacations, holidays, personal leave, and sick days. Typically, employees receive two to four weeks of vacation plus 10 to 12 holidays yearly. Companies also grant between one and four personal days, while sick days can vary from five to 15 days a year. Some companies have written policies that include paid time off for election, bereavement leave, military service, and jury duty.
Because you are paid even though you are not working, paid time off is a significant component of your "hidden paycheck" and can increase the value of your total compensation.
A portion of your employer's cost for this time off is included in your base salary but does not represent the full cost of this benefit. When an employee takes paid time off, the employer continues to pay that employee and either pay another person to take on that employee's work or suffers a loss in productivity and associated soft costs for the days the employee is out.