Did you know that 51% of workers misunderstand the value of their total compensation?
That's why it is essential to educate your employees on the full scope of what they’re being paid by providing a total compensation statement. A compensation statement is one way an employer can show employees the total value of their benefits and compensation package.
What is a total compensation statement and how does it provide value?
Total compensation statements give employees information on the complete pay package awarded to them on an annual basis, including both direct and indirect compensation. While not required, total compensation statements are extremely valuable. When employees have a complete and comprehensive understanding of what their employer is providing to them, it increases both morale and loyalty.
What is included in a total compensation statement?
This statement includes direct wages (that employees are likely already aware of) as well as the hidden cost of employer-provided benefits such as bonuses, commissions, retirement contributions, insurance premiums, and paid time off (PTO). A total compensation statement will typically include the following five categories:
Direct compensation – wages, bonuses, commissions, etc.
Indirect compensation: taxes – social security and unemployment taxes, worker’s compensation insurance, etc.
Indirect compensation: benefits – 401(k) matching or retirement, Social Security contributions, medical insurance, etc.
Paid time off – PTO, sick leave, paternity leave, vacation, holiday pay
Work-life compensation – tuition reimbursement, training, wellness, etc.
Miscellaneous compensation – professional fees and memberships, licenses, parking, cell phone reimbursement
Do you need help with your total compensation statement?
Premier HR Solutions will work directly with your payroll administrator to collect the necessary data and run these compensation reports for you – there is no need to spend hours of your valuable time with data collection and report running when you have a dedicated team of HR experts available to do it for you. If you’re interested in partnering with us, email our CEO & Founder Scholley Bubenik at sbubenik@premierhsolutions.net.
Premier HR Total Compensation Statement Example:
Once you receive your employee total compensation statements from us, your management team will have the information needed to communicate directly with each of your team members to help them better understand the overall value of their total compensation. This will boost morale and loyalty amongst your team, thereby reducing turnover and boosting productivity across your organization.