Earnings and Benefits
Firms Providing Benefits
For more than fifty years, the U.S. Chamber of Commerce has surveyed a cross section of businesses in regard to the benefits offered. The average benefit payment expended by the 609 firms that replied to the survey in 2003 amounted to 37.6% of their total payroll, down from 39% in 2001. In 2005, according to Employee Benefits in Private Industry in the United States, 90% of organizations that employed 100 workers or more offered some type of retirement plan for their employees, as did 49% of smaller firms; 96% of large firms offered a health insurance plan, compared with 61% of companies that employed between one and ninety-nine workers. Goods-producing and services-producing employer firms were just as likely to offer retirement plans (51%) and health plans (63%).
Benefits as a Percentage of Total Payroll
In its 2003 study, the Chamber of Commerce reported that, on average, $0.63 of every payroll dollar is paid out directly in wages. Of the remaining $0.37, 8.3 cents covers legally required taxes, compensatory fees, and insurance; 11.4 cents goes to medical benefits; 9.9 cents covers paid time off (including vacation or sick days); and 6.7 cents covers retirement and savings benefits for employees.
According to the U.S. Chamber of Commerce, average annual benefits per employee in 2003 amounted to $18,541, which is an increase of 1.5% from the average of $18,254 reported in 2001. Companies report that since 1975 (when benefits accounted for 30% of payroll) benefits costs as a percentage of payroll dollars have risen due to both rising health insurance costs and the growth of legally mandated benefits, such as Social Security payments.
|Percent of workers participating in retirement and healthcare benefits by selected characteristics, private industry, March 2005|
|Characteristics||Retirement benefits||Healthcare benefits|
|All Plans*||Defined benefit||Defined contribution||Medical care||Dental care||Vision care||Outpatient Prescription drug coverage|
|*Includes defined benefit pension plans and defined contribution retirement plans. The total is less than the sum of the individual items because many employees participated in both types of plans.|
|Note: Because of rounding, sums of individual items may not equal totals|
|SOURCE: "Table 2. Percent of Workers Participating in Retirement and Healthcare Benefits, by Selected Characteristics, Private Industry, National Compensation Survey, March 2005," in National Compensation Survey: Employee Benefits in Private Industry in the United States, March 2005, U.S. Department of Labor, Bureau of Labor Statistics, August 2005, http://www.bls.gov/ncs/ebs/sp/ebsm0003.pdf (accessed January 8, 2006)|
|Average wage less than $15 per hour||35||11||29||39||24||15||35|
|Average wage $15 per hour or higher||71||34||59||72||52||32||65|
|1 to 99 workers||37||9||32||43||24||14||37|
|100 workers or more||67||36||53||65||51||32||61|
|East North Central||56||24||46||55||38||21||53|
|West North Central||56||22||46||52||34||17||49|
|East South Central||44||13||41||56||36||26||53|
|West South Central||45||17||38||52||30||17||46|
- Earnings and Benefits - Employer-sponsored Health Insurance
- Earnings and Benefits - Employee Benefits
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