page_title: Employee compensation in the United States
section_title: Benefits
hierarchical_section_title: Employee compensation in the United States / Benefits
caption_attribution_description: English: Full- and part-time workers: Access to selected paid leave benefits, private industry, from: National Compensation Survey (NCS), BLS, USDL, March 2011
context_page_description: Employer compensation in the United States refers to the cash compensation and benefits that an employee receives in exchange for the service they perform for their employer. Approximately 93% of the working population in the United States are employees earning a salary or wage.
  Typically, cash compensation consists of a wage or salary, and may include commissions or bonuses. Benefits consist of retirement plans, health insurance, life insurance, disability insurance, vacation, employee stock ownership plans, etc.
  Compensation can be fixed and/or variable, and is often both. Variable pay is based on the performance of the employee. Commissions, incentives, and bonuses are forms of variable pay.
  Benefits can also be divided into company-paid and employee-paid. Some, such as holiday pay, vacation pay, etc., are usually paid for by the firm. Others are often paid, at least in part, by employees—a notable example is medical insurance.
  Compensation in the US is shaped by law, tax policy, and history.
context_section_description: The term "fringe benefits" was coined by the War Labor Board during World War II to describe the various indirect benefits which industry had devised to attract and retain labor when direct wage increases were prohibited.
  Employee benefits in the United States might include relocation assistance; medical, prescription, vision and dental plans; health and dependent care flexible spending accounts; retirement benefit plans (pension, 401(k), 403(b)); group-term life and long term care insurance plans; legal assistance plans; adoption assistance; child care benefits; transportation benefits; and possibly other miscellaneous employee discounts (e.g., movies and theme park tickets, wellness programs, discounted shopping, hotels and resorts, and so on). Companies provide benefits that go beyond a base salary figure for a number of reasons: To raise productivity and lower turnover by raising employee satisfaction and corporate loyalty, take advantage of deductions, credits in the tax code. Wellness programs can also lower health insurance costs.
  Many employer-provided cash benefits (below a certain income level) are tax-deductible to the employer and non-taxable to the employee.
  Some fringe benefits (for example, accident and health plans, and group-term life insurance coverage (up to US$50,000) (and employer provided meals and lodging in-kind), may be excluded from the employee's gross income and, therefore, are not subject to federal income tax in the United States.  Some function as tax shelters (for example, flexible spending accounts, 401(k)'s, 403(b)'s). Fringe benefits are also thought of as the costs of keeping employees other than salary. These benefit rates are typically calculated using fixed percentages that vary depending on the employee’s classification and often change from year to year.
  Executive benefits (e.g. golden handshake and golden parachute plans), exceed this level and are taxable.
  Full-time and high wage workers are much more likely to have benefits, as the charts to the right indicates.
  Benefits can be divided into as company-paid and employee-paid. Some, such as holiday pay, vacation pay, etc., are usually paid for by the firm. Others, are often paid, at least in part, by employees. A notable example is medical insurance, which has risen in cost dramatically in recent decades and been shifted to employees by many American employers. Even when paid entirely by employees, these programs may still provide value to employees and be called benefits because their cost may be considerably lower than that of equivalent non-employer-sponsored programs, thanks to employers having negotiated discounts with providers.
  Some benefits, such as unemployment and worker's compensation, are federally required and arguably can be considered a right, rather than a benefit.
  American corporations often offer cafeteria plans to their employees.  These plans would offer a menu and level of benefits for employees to choose from.  In most instances, these plans are funded by both the employees and by the employer(s).  The portion paid by the employees is deducted from their gross pay before federal and state taxes are applied.  Some benefits would still be subject to the Federal Insurance Contributions Act tax (FICA), such as 401(k) and 403(b) contributions; however, health premiums, some life premiums, and contributions to flexible spending accounts are exempt from FICA.
caption: from US Department of Labor, Bureau of Labor Statistics, National Compensation Survey (NCS),  March 2011[23]
exif: {}