Employer Costs for Employee Compensation in the U.S.

by Jessica Nelson

April 16, 2019

Employer’s total costs for employee compensation include wage and salary earnings, along with multiple categories of benefits. In December 2018, total compensation averaged $36.32 per hour worked among civilian workers in the U.S. Wages and salaries amounted to $24.91 per hour, while benefits totaled $11.41. Wages and salaries accounted for 69 percent of employees’ total compensation across the civilian workforce, while the other 31 percent came in a variety of benefits.

State and local government employee compensation averaged $50.55 per hour. Benefits account for a larger share of total compensation for state and local government employees, at 38 percent of total compensation.

Total compensation for private industry workers averaged $34.05, with $23.85 in wages and salaries and $10.20, or 30 percent, in total benefits. Insurance and legally required benefits each accounted for 8 percent of employee compensation. Paid leave made up another 7 percent. Retirement and savings were 4 percent of compensation, and supplemental pay was 3 percent of the total.
Employee Compensation by Occupation Group

Among private industry workers, total compensation was greatest for employees in management and professional occupations. Total employer costs for management and professional compensation reached $59.57 per hour worked in December 2018. Wages and salaries topped $40 per hour on average among these employees, with benefit costs amounting to another $18 per hour. Paid leave accounted for a bit more of total compensation among the management and professional workforce, at 9 percent of compensation.

Employees in natural resources, construction, and maintenance occupations averaged $35.33 in total compensation. Benefits totaled $11.38 per hour, 32 percent of total compensation, while wages and salaries averaged $23.95. Legally required benefits, and retirement and savings both accounted for a greater share of total compensation among these workers, while paid leave costs for these employees were lower than the private industry worker average.

The production, transportation, and material moving workforce averaged compensation costs of $28.51 per hour. Total compensation was tilted even more in favor of benefits for these workers, with 34 percent of the total in benefits and 66 percent of compensation in wages and salaries. Legally required benefits and insurance both account for a greater-than-average share of total compensation among these workers, which may be partially due to the dangerous and physically difficult aspects of many of these jobs.

Employer costs to compensate sales and office workers averaged $25.77 per hour worked in December 2018. Wages and salaries made up 72 percent of total compensation, with the other 28 percent in benefits. Retirement and savings, and paid leave made up smaller-than-average shares of total compensation for sales and office workers.

Service workers averaged by far the lowest total compensation, at $16.78 per hour worked. These workers had the largest share of their total compensation in the form of wages and salaries, at 75 percent, but the nominal costs of both wages and salaries and total benefits is quite low for these workers compared with other occupation groups. Employer costs for supplemental pay, retirement and savings, and paid leave for these workers are all very low in comparison.

Union Workers Have Greater Total Compensation

For private industry workers represented by unions, wages and salaries reached $27.85 per hour in December 2018, and total benefit costs averaged $19.44 per hour. For nonunion workers, wages and salaries averaged $23.47, while total benefits came in at $9.33 per hour, less than half the total benefit cost for private-sector union workers.
Benefits make up a solid 41 percent of total compensation costs among union workers, contrasted with 28 percent for the nonunion workforce. Insurance costs per hour for union workers are almost three times the hourly cost for nonunion workers. Retirement and savings costs also differ sharply, with the cost for union workers ringing in at four times the cost for nonunion workers. Employer costs for union workers were greater than for nonunion workers in every category of benefits.

Across the workforce, more than three out of 10 dollars in employer costs for employee compensation are provided in benefits. When we look at average wage statistics, it’s important to realize that wages don’t tell the entire story. Of course, in many cases benefits are skewed toward already higher wage forms of work, making the gap in total compensation even larger than wage data can show.

 


Our Latest Articles Our Latest Articles

Latest Items