U.S. Chamber Finds Employee Benefits Add More Than A Third to Payroll Cost

WASHINGTON, D.C. — The United States Chamber of Commerce reported that employee benefits made up more than one-third of company payrolls in 1999, with health insurance the most expensive single benefit cost, according to its recent nationwide survey.

"Employers continue to make a major investment in employee benefits as an indispensable employee-retention tool in today's tight labor market," said Dr. Martin Regalia, U.S. Chamber vice president and chief economist.

Employee benefits cost employers an additional 36.8% over wages in 1999, or an average of $14,060 per employee, according to the Chamber's Employee Benefits Study. Medical insurance premiums were the highest-cost single benefit, about one-fifth of total benefits (an average of $2,777 per employee), more than federal payroll taxes (an average of $2,666 per employee). Paid-time-off — vacations, holidays, and sick leave combined — accounted for about one-third of all benefits (an average of $4,113 per employee).

In addition, the study found that benefit costs were nearly one-fifth higher in metropolitan areas, averaging 40% of payroll for metropolitan-based companies, versus 34% for companies in non-metropolitan areas. Metropolitan-based companies reported higher costs for paid-time-off and retirement and savings plan benefits, while non-metropolitan companies reported higher medical benefit costs.

The Chamber has conducted studies on employer benefit practices for more than 50 years. The studies are widely used for benchmarking and documenting employee benefit costs.

The U.S. Chamber is now seeking companies to participate in this year's Employee Benefits Study.

The U.S. Chamber of Commerce is the world's largest business federation, representing more than three million businesses and organizations of every size, sector and region.

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EDITOR'S NOTE: For a review copy of the study, call Chamber Media Relations at 202-463-5682.

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