According to the US Department of Labor's Bureau of Labor Statistics' (BLS) calculations for September 2004, employers spend an average of $7.40 per hour per employee on benefits alone. That amount includes benefits employers are required to pay and voluntary benefits that range from paid days off to employer contributions toward health insurance and retirement income.
Of the average $7.40 per hour that employers paid for benefits, about 28 percent of benefits (or 8 percent of compensation) was associated with legally required payments for Social Security taxes, unemployment insurance, and worker’s compensation. Employers' contributions toward health insurance accounted for a quarter of benefits costs (7 percent of compensation), paid leave accounted for about 23 percent of total benefits (over 6 percent of compensation), and employers' voluntary contributions toward retirement and savings plans accounted for about 14 percent of benefits (4 percent of compensation).
Benefits, of course, aren't the only added costs. In addition to benefits, employers have general overhead expenses to account for such as the cost of office space, equipment and supplies.
For more information on the cost of employee benefits in big and small businesses see http://www.sba.gov/advo/research/rs262tot.pdf
Hidden Employee Costs
It’s true in the UK here too. And the burden of figuring out the ever greater complexity of tax and national insurance etc keeps on growing.
This summer we took on 2 university students for work placement projects. It’s gone OK but the level of bureaucracy for a 2 month placement means we probably won’t do it again.
The additional costs of employing any staff can be pretty well concealed.
Posted by: Keith Longmire on September 7, 2005 at 8:55 AM