The Benefit Of Employee Benefits
  Have you ever considered giving your employees a raise? Have you found a raise to be successful in motivating your employees? How much of a raise would you consider to be appropriate? Say, for example, you gave your employees a 5% raise. As an employer, that 5% raise costs you more than just the 5% increase in salary, as now you have to pay more towards EI, CPP, Worker’s Comp and maybe even a pension plan. In essence, that 5% raise probably costs you about 7%.

From an employee’s standpoint, the 5% raise probably results in a 3% increase in their take-home pay. For an employee earning $30,000 a year, that 5% raise would mean and extra $35 a pay-cheque in take-home pay (if paid bi-weekly). This increase in take-home pay is so small that it generally tends to upset an employee. They think that a raise means a significant increase in salary. How motivating will this raise prove to be in the long-run?

Why not put a group insurance plan into effect instead of a raise? You can provide your employees with a group benefit package that includes Life Insurance, Accidental Death and Dismemberment, Long-Term Disability, Extended Healthcare and Dental care, all for about 4% of the annual payroll. And…this 4% cost to you as the employer is fully tax-deductible as a business expense!

Think of your employee earning $30,000 a year…a group benefit plan will yield more in return to that employee than just $35 per pay cheque. Also, this 4% figure is based on you (the employer) paying 100% of the premium. However, the premium for a group insurance plan is often split between employees and the employer. If your employees pay 100% of the premium for the Life insurance and Disability coverage, we have reduced the 7% cost of a raise to a 3.3% tax deduction!

EVEN MORE BENEFITS:
  • Helps to attract talented employees
  • Improves employee retention which in turn saves company dollars
  • Ensures that employees will have access to prescription drugs when needed, thus shortening sick leaves
  • Gives employees a feeling of security should health issues arise
We work with a Financial Advisor who can assist you with a benefit review.  Please contact us today!

 
 
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