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Employee Benefits

Employee Benefits Companies must consider many personnel costs. These costs include employee benefits, such as health insurance and vacation days. What are other employee benefits?. Lesson Objective Calculate the rate of employee benefits based on annual gross pay. Content Vocabulary.

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Employee Benefits

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  1. Employee Benefits Companies must consider many personnel costs. These costs include employee benefits, such as health insurance and vacation days. What are other employee benefits?

  2. Lesson Objective Calculate the rate of employee benefits based on annual gross pay. Content Vocabulary employee benefits Services offered by businesses to employees beyond salary or wages, such as health insurance, paid vacation, and a retirement plan. • employee benefits

  3. Example 1 The personnel department of Commercial Credit Company is preparing annual reports on employee benefits. Tamika Rey’s total annual benefits are what percent of her annual salary?

  4. Example 1 (cont.) Tamika Rey Annual salary: $41,340 Weekly salary: $795 Vacation: 2 weeks @ $795/week $1,590.00 Holiday: 8 days @ $159/day $1,272.00 Health insurance: 12 months @ $162.50/mo $1,950.00 Sick leave policy: 30 days @ $159/day $4,770.00 Unemployment insurance: 4.6% × $41,340 $1,901.64 Social Security (FICA): 6.2% × $41,340 $2,563.08 Medicare 1.45% × $41,340 $599.43 Total $14,646.15

  5. Example 1 Answer Step: Find the rate of benefits. Total Benefits ÷ Annual Gross Pay $14,646.15 ÷ $41,340.00 = 0.3542 or 35.4%

  6. Example 2 Compute the rate of employee benefits based on annual gross pay for Tamika Rey (from Example 1) if she now receives 3 weeks of vacation. Everything else stays the same.

  7. Example 2 Answer: Step 1 Find the total benefits. Amount for Week + Total Annual of Vacation Benefits $795.00 + $14,646.15 = $15,441.15

  8. Example 2 Answer: Step 2 Find the rate of benefits. Total Benefits ÷ Annual Gross Pay $15,441.15 ÷ $41,340.00 = 0.3735 or 37.4%

  9. Practice 1 John Sherlock’s annual gross pay is $41,600. His benefits total $11,270. What is his rate of benefits?

  10. Practice 1 Answer 27.09%

  11. Practice 2 Bridget Meyers’ monthly gross salary is $2,750. Her annual benefits total $6,600. What is her rate of benefits?

  12. Practice 2 Answer 20%

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