Here are the 5 categories of benefits that eat the biggest share of what U.S. civilian employers spend to employ an employee.
5. Insurance Other Than Medical Insurance
2018: 0.5%

In June 2017 and in June 2018, short-term disability insurance and long-term disability insurance accounted for 0.3% of employment costs. Life insurance accounted for 0.1%.
4. Retirement Plans
2018: 5.33%
2017 5.41%

The share of spending going toward defined benefit pensions fell to 3.34%, from 3.45%. The share going toward 401(k) plans and other defined contribution plans increased to 1.99%, from 1.96%.
3. Paid Leave
2018: 7.1%.
2017: 7.0%.

Some policymakers may think of spending on paid leave as a rounding error, but employers spend more on that than on retirement benefits.
2. Legally Required Benefits
2018: 7.3%.
2017: 7.4%.

This category includes spending on taxes or fees for Social Security, Medicare, federal unemployment insurance, state unemployment insurance and workers' compensation insurance.


1. Medical
2018: 8.2%.
2017: 8.3%.

(Related: How to Find the ‘Hidden Rich’ in Your Area)

U.S. civilian employers spent an average of $36.22 per hour in June on what the federal government classifies as “compensation costs” — but only $24.72 of that total flowed into workers’ pockets.

Benefits ate up $11.50 of the compensation spending, according to new data from the Bureau of Labor Statistics.

In June 2017, civilian employers spent an average of $35.28 per hour on compensation, with $24.10 paid out as wages and $11.18 going toward benefits costs.

The share of compensation spent on benefits held steady at 31.7%.

A copy of the new compensation report is available here. The comparable report from 2017 is available here.

Benefits spending helps provide important comfort and safety-net arrangements for workers, such as sick pay, overtime pay and Medicare.

Financial professionals in the employee benefits products may like to see benefits spending rise, because employers use private insurance to provide some key benefits.

Financial professionals who work mainly with individual clients may like to see the share of employer compensation spending on benefits stabilize, or even fall. From the perspective of a financial professional in the individual market, every penny spent on a one-size-fits-all benefits program is a penny not available for individual retirement accounts, individual disability insurance, individual life insurance, and other products tailored to suit the needs of an individual client.

For a look at the five categories of benefits that ate up the biggest share of U.S. civilian employers’ compensation spending this past June, and in June 2017, see the idea cards in the slideshow above.

— Read More Workers Have Life Benefits: Fedson ThinkAdvisor.

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