Total Employee Compensation Package

The total cost of employing a person is more than just their salary or hourly wages. Employers are required to pay certain government-mandated benefits, including Social Security and Medicare taxes, federal and state unemployment insurance, and in some states, additional payroll-related taxes. On top of those mandatory costs, most employers also provide insurance benefits such as medical, dental, life and disability coverage, as well as retirement plan contributions and a variety of fringe benefits. Understanding the total cost of an employee — sometimes called the "fully loaded" cost — helps businesses budget accurately for staffing and gives employees a clearer picture of the full value of their compensation package.