By Lauren Bikoff, MLS
Benefits compensation makes up a rising portion of total compensation.
Employer-provided benefits costs for civilian workers in private industry and state and local governments in March 2020 averaged $11.82 per hour worked, accounting for 31.3 percent of total compensation costs, which averaged $37.73 per hour worked. The cost of benefits as a percentage of compensation has risen over the past several years from 27.4 percent of total compensation. These are among the findings of the March 2020 Employer Costs for Employee Compensation report, produced quarterly by the Bureau of Labor Statistics (BLS).
Insurance benefits costs averaged $3.27 per hour, or 8.7 percent of total compensation, in March 2020, representing the largest nonwage employer cost. Employer costs for paid leave benefits averaged $2.76 (7.3 percent), legally required benefits costs averaged $2.72 (7.2 percent), and the cost of retirement and savings benefits averaged $1.97 (5.2 percent).
Private industry. According to the BLS, private industry benefits costs averaged $10.53 per hour in March 2020, accounting for 29.8 percent of total compensation costs, which averaged $35.34 per hour worked. Private industry employer costs for insurance benefits averaged $2.80 (7.9 percent), legally required benefits averaged $2.70 (7.6 percent), paid leave benefits averaged $2.58 per hour worked (7.3 percent), and retirement and savings benefits averaged $1.25 (3.5 percent).
State and local governments. In March 2020, state and local government benefits costs accounted for 37.8 percent of total compensation, or $19.82 per hour worked. Employer costs for insurance benefits averaged $6.15 per hour, or 11.7 percent of total compensation. The largest component of insurance costs was for health insurance, which averaged $6.00 per hour worked, or 11.4 percent of total compensation. The average cost for retirement and savings benefits in state and local governments was $6.39 per hour worked, or 12.2 percent of total compensation. Costs for legally required benefits averaged $2.88 per hour worked, or 5.5 percent of total compensation.
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