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FRINGE BENEFIT COSTS
Introduction
The workbook calculates the fringe benefit costs for one employee.
The "Summary" worksheet illustrates the annual cost in both dollars and as a % of salary
for an employee earning $25,000/year (fringes are 95% of salary) to $200,000/year
16% of salary). In this example, we have assumed the health insurance
coverage is average, the employee has coverage for his family and the employer
is providing 80% of the cost of the insurance.
Worksheet Description
1 Introduction
2 Summary results
3 Payroll tax calculation
4 Health insurance calculation
5 Other benefits calculation
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File = 4d1d5dbd-5e56-401e-b5b9-3510c56c5326.xls
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FRINGE BENEFIT COSTS
Summary Results
annual salary 25,000 70,000 100,000 200,000
FRINGES RELATED TO TOTAL SALARIES
annual fringes -- dollars
payroll taxes see separate worksheet 2,384 5,826 8,121 9,993
health insurance see separate worksheet 18,720 18,720 18,720 18,720
other see separate worksheet 2,550 2,550 2,550 2,550
total 23,654 27,096 29,391 31,263
annual fringes -- % of total salaries
payroll taxes 9.5% 8.3% 8.1% 5.0%
health insurance 74.9% 26.7% 18.7% 9.4%
other 10.2% 3.6% 2.6% 1.3%
total 94.6% 38.7% 29.4% 15.6%
Path = C:\Docstoc\Working\pdf\
File = 4d1d5dbd-5e56-401e-b5b9-3510c56c5326.xls
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FRINGE BENEFIT COSTS
Payroll Tax Calculation
EXAMPLE -- employee earns $25,000
Payroll Increment 7,000 1,000 17,000 0
Cumulative 7,000 8,000 25,000 25,000 total
Tax FICA 6.20% 434 62 1,054 0 1,550
Medicare 1.45% 102 15 247 0 363
SUTA 3.70% 259 37 0 0 296
FUTA 6.20% 434 0 0 0 434
FUTA credit -259 0 0 0 -259
970 114 1,301 0 2,384
13.9% 11.4% 7.7% 9.5%
EXAMPLE -- employee earns $70,000
Payroll Increment 7,000 1,000 62,000 0
Cumulative 7,000 8,000 70,000 70,000 total
Tax FICA 6.20% 434 62 3,844 0 4,340
Medicare 1.45% 102 15 899 0 1,015
SUTA 3.70% 259 37 0 0 296
FUTA 6.20% 434 0 0 0 434
FUTA credit -259 0 0 0 -259
970 114 4,743 0 5,826
13.9% 11.4% 7.7% 8.3%
EXAMPLE -- employee earns $100,000
Payroll Increment 7,000 1,000 92,000 0
Cumulative 7,000 8,000 100,000 100,000 total
Tax FICA 6.20% 434 62 5,704 0 6,200
Medicare 1.45% 102 15 1,334 0 1,450
SUTA 3.70% 259 37 0 0 296
FUTA 6.20% 434 0 0 0 434
FUTA credit -259 0 0 0 -259
970 114 7,038 0 8,121
13.9% 11.4% 7.7% 8.1%
Path = C:\Docstoc\Working\pdf\
File = 4d1d5dbd-5e56-401e-b5b9-3510c56c5326.xls
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FRINGE BENEFIT COSTS
Payroll Tax Calculation
EXAMPLE -- employee earns $200,000
Payroll Increment 7,000 1,000 98,800 93,200
Cumulative 7,000 8,000 106,800 200,000 total
Tax FICA 6.20% 434 62 6,126 0 6,622
Medicare 1.45% 102 15 1,433 1,351 2,900
SUTA 3.70% 259 37 0 0 296
FUTA 6.20% 434 0 0 0 434
FUTA credit -259 0 0 0 -259
970 114 7,558 1,351 9,993
13.9% 11.4% 7.7% 1.5% 5.0%
Path = C:\Docstoc\Working\pdf\
File = 4d1d5dbd-5e56-401e-b5b9-3510c56c5326.xls
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FRINGE BENEFIT COSTS
Health Insurance Calculation
plan name plan A plan B
amount of coverage average better than average
plan cost percentile 50% 75%
period monthly annual monthly annual
gross
individual 600 7,200 850 10,200
couple 1,250 15,000 1,637 19,644
family 1,950 23,400 2,534 30,408
less employee contribution
20%
individual 120 1,440 170 2,040
couple 250 3,000 327.4 3,929
family 390 4,680 506.8 6,082
net to company
individual 480 5,760 680 8,160
couple 1,000 12,000 1,310 15,715
family 1,560 18,720 2,027 24,326
function of assumed
plan type (minimal, average, Cadillac) average
mix of individuals, couples and families 1/3. 1/3, 1/3
employee contribution % 20%
number of employees covered (some are covered by spouse's employer) 100%
geography (MA is more expensive than NH)
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File = 4d1d5dbd-5e56-401e-b5b9-3510c56c5326.xls
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FRINGE BENEFIT COSTS
Other Benefits Calculation
Estimated annual cost
other insurance
dental 750
disability, short term 100
disability, long term 300
life 400
retirement plan matching (401k) 0
training courses and tuition reimbursement 1,000
non cash benefits, like stock options and phantom stock 0
2,550
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File = 4d1d5dbd-5e56-401e-b5b9-3510c56c5326.xls
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