Compensation, Costs, and Comparisons

Total compensation includes the value of all the perks and benefits you get from the company in addition to your salary. Also, the cost to employ you is about 13-18% more than the total compensation figure, due to employer taxes and contributions to state, federal, and local institutions. A sample listing is seen below. Calculating Annual Cost to the Company is important while changing jobs as it more often than not determines what your compensation will be in the new Company. At the same time all the components are not always apparent. In order to arrive at a comprehensive figure one has to carefully add the value of all components or their cash equivalent.

For example, if you are paid 75,000 as a salaried employee, and you see a deduction on your paycheck for social security, you might not realize that your employer is paying an equivalent amount equal to your contribution.

Also, if you are trying to compare hourly pay vs. a total salary figure, you might want to see our section on hourly vs. salary configurations.

Here is a Sample List of Employer taxes (that are added to the cost of an employee):

Medicare
Social Security
FUTA (Federal Unemployment tax)
State unemployment tax
Worker’s compensation
Mgt & Admin
Facilities