# 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

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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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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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