How Much Are Your Employee Benefits Really Costing?

According to the US Bureau of Labor Statistics, benefits make up more than 30% of regular pay. But figuring out what your benefits are worth isn’t always easy.

You may need to do a little digging to find out how much your employer contributes to health insurance, retirement plans, and other benefits. Some benefits also have a non-monetary value, and people may value the same benefits differently.

For example, people with health conditions are more likely to appreciate guaranteed access to disability or life insurance that would otherwise be difficult to obtain or too expensive. Someone with student loans can appreciate an education debt assistance program much more than someone without student loans.

Now that open recruitment season is upon us again, it’s a great time to review your employer’s current offerings. Understanding what your benefits are worth can renew your commitment to your current job—or make you realize it’s time to look for a better deal. If you’re thinking about becoming self-employed, you can better understand how much more you’ll need to earn to replace your current benefits.

Here are some of the most common benefits, along with typical employer contribution amounts, according to Mercer, a workers’ compensation consultant.

Health Insurance: $5,000 to $20,000

Health insurance plans provided by employers range from simple to quite extravagant. However, on average, employers paid 83% of the $7,739 premium last year for single coverage and 73% of the $22,221 premium for family coverage, according to KFF, a health insurance research organization.

You can find out how much you and your employer paid for your health insurance last year on your 2021 W-2, said Paul Fronstein, director of health benefits research at the Employee Benefit Research Institute, or EBRI. The annual figure is often reported using the code “DD”.

Your employer can also break their contribution into your salary. A pay slip is a document that shows details of your gross pay and earnings after tax, together with various deductions. You can often access your pay slip through your company’s online payroll system; contact HR for details.

Premiums, of course, are only one factor in evaluating your health insurance coverage. Deductibles, co-pays and provider networks also matter. Having access to different types of plans can make open enrollment more confusing, but it can also help you tailor your coverage to your situation.

Retirement Savings Plan: 3% to 10% of salary

EBRI surveys have consistently shown that the benefit employees value most after health insurance is access to a retirement plan, with all other benefits coming in a “distant third,” Fronstein said.

According to AARP, people who have workplace retirement plans, such as 401(k)s, are significantly more likely to save for retirement than those who don’t. These plans offer automatic payroll deductions, and many sign people up automatically as well.

Most 401(k)s also come with company matches — free money that can help employees get rich faster. Among the most common matches are 50% of the first 6% of salary that the employee contributes, or a dollar-for-dollar match of 3% to 6% of salary.

Employers can contribute an even larger percentage of salary into traditional pension plans, which promise a set amount of monthly retirement benefits. This is in contrast to 401(k)s and other defined contribution plans, where the amounts you receive in retirement depend on the amount of your contributions and the performance of your investments.

Pensions are still common among public agencies, colleges and nonprofit health care organizations, although only about 15% of private sector workers have access to such plans, according to the Bureau of Labor Statistics.

Everything else: from zero to thousands

Employers who provide dental insurance typically pay between $500 and $2,500 a year for coverage, according to Sandra Sweeney, head of Mercer’s career practice. Life insurance costs an average of $100 to $300 per employee, while disability insurance typically costs $250 to $1,500.

Employers may offer access to other coverage, such as supplemental life insurance, long-term care insurance, or pet insurance. Workers usually pay the full cost but may benefit from group rates for the policy, Fronstein said.

Help with education costs is also becoming more popular. According to the Society for Human Resource Management, about half of employers offer tuition assistance. And of the companies surveyed by EBRI last year, 17% offered some form of student loan assistance, and another 31% planned to do so.

Workers can also exclude up to $5,250 in tuition benefits from their income on their tax returns, according to the IRS. And until 2025, the limit also includes student loan repayment assistance.

Remember that your employer provides benefits to attract, retain and reward employees. If you’re not sure what all your benefits are or what they’re worth, your HR department will be happy to tell you, Fronstein said.

“Ask your employer,” Fronstein said. – This is not a secret.

This column was provided to The Associated Press by personal finance website NerdWallet. The content is for educational and informational purposes and does not constitute investment advice. Liz Weston is a NerdWallet columnist, certified financial planner, and author of Your Credit Score.