Benefits January 22, 2004

Employee Benefits Taking Up More Payroll

January 22, 2004 (PLANSPONSOR.com) - Employee benefits cost 42.3% of payroll in 2002, an increase from 2001's 39%.
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Medically related payments accounted for the lion’s share of employee benefit costs in 2002 and also saw the sharpest increase. Medical benefits accounts for 15.2% of payroll costs in 2002, up from 11% in 2001, according to the United States Chamber of Commerce’s release of its annual benefits survey.

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Coming in second among payroll benefit expenditures were compensation for holidays and time off, which accounted for 11.6% of payroll. Retirement and savings payments, accounted for 6.2% of payroll costs and were third in terms of overall benefits expenses.

Overall, workers at companies participating in the US Chamber of Commerce’s survey received an average of $18,000 worth of employee benefits in addition to wages, the survey revealed. Of that amount

  • $6,300 went for medically related benefits
  • $5,000 went for payments for time not worked
  • $2,600 went for retirement benefits.

“Despite rising costs, employers continue to offer a broad array of benefits to their workers,” said Bruce Josten, executive vice president of the US Chamber of Commerce said in a news release. “These higher costs are being paid voluntarily by employers and demonstrate a commitment to employees and to maintaining a strong workforce.”

The Chamber has annually conducted an employee benefits study for more than 50 years. Nearly 400 companies participated in the latest survey.

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