August 29, 2018

The national average paid out by employers for employee benefits is 39% of total payroll costs.

This figure comes from the U.S. Chamber of Commerce, based on a survey of nearly 400 U.S. companies of various sizes, industries and geographic locations.


Here are some of the specific figures from the survey:

  • One in 10 employers put more than 48% of their payroll dollars into benefits.
  • One in 10 employers put less than 23% of their payroll dollars into benefits.
  • Larger employers paid more per employee for benefits. For example, employers with 99 or fewer employees provided an average of 32.6% of payroll — or $13,064 per employee — in benefits. But employers with 1,000 to 2,499 employees put 39.6% of payroll — or $18,910 per employee — into benefits.

The average payroll dollar is broken down like this: 61 cents in wages, 11 cents in medical benefits, 10.9 cents for holidays and vacation, 8.2 cents for legally required payments such as payroll taxes and Workers’ Comp, 8 cents in retirement and savings contributions and 1 cent for other costs.


Here’s what the benefit dollars go for:

  • Nearly 100% of surveyed companies provided paid holidays, health insurance and paid vacation benefits to full-time employees.
  • Retirement programs were offered by 95% of surveyed firms.
  • Life insurance was provided by 91% of businesses.
  • Sick leave was paid for by 77% of firms.
  • Long-term disability coverage was provided by 69% of companies, while 59% offered short-term disability to full-time employees.
  • Paid holidays were given to part-time employees by 44% of businesses.
  • Only 24% of firms provided health benefits to part-time employees.

However, “average” percentages can be misleading. Comparing your own company’s benefits costs to a national average is not very helpful.

Smart strategy: Do a breakdown of your payroll costs. Calculate how much each item in the employee’s payroll costs. Then share this information with your employees once a year in a report. The more employees know exactly what they receive — and what it costs the more likely they’ll appreciate the full value of their job.

© 2018