One way an employer can show employees the total value of their benefits and compensation package is to present a total compensation statement. Total compensation statements give employees information on the complete pay package awarded to them on an annual basis, including both direct and indirect compensation. Direct compensation can be defined as “all compensation (base salary and/or incentive pay) that is paid directly to an employee.” Indirect compensation can be defined as “compensation that is not paid directly to an employee and is calculated in addition to base salary and incentive pay (e.g., employer-paid portions of health/dental/vision insurance, retirement benefits, educational benefits, relocation expenses, employee paid time off).” The more detail that an employer can provide, the more beneficial the statement. Some common items to include in a total compensation statement are:
- Salary/hourly rate
- Medical benefits coverage—include amount paid by employee and employer
- Flexible spending account information
- Paid leave—include vacation/sick/PTO, holiday, personal, bereavement, military pay, jury duty, etc.
- Disability insurance
- Life insurance
- Employee assistance program
- Retirement benefits—include 401(k)/403(b), pension plans, etc.
- Educational assistance programs
- Relocation expenses
- Learning and development offerings
- Career-advancement opportunities
See Sample total compensation statement.
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