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Fringe Benefit Calculator - Small Business Financial Management

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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




Path = C:\Docstoc\Working\pdf\
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%




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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%


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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%




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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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