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Employee Benefits Companies must consider many personnel costs. These costs include employee benefits, such as health insurance and vacation days. What are other employee benefits?

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Lesson Objective Compute the new salary after merit increase and cost-of-living adjustment. Content Vocabulary salary scale A table of wages or salaries that compares various jobs in a company, used to estimate the costs of giving an employee a cost-of-living adjustment or a merit increase. cost-of-living adjustment merit increase cost-of-living adjustment A raise in an employees salary to help keep up with inflation. merit increase A raise in salary to reward an employee for the quality of work.

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Elaine Taylor is a systems analyst (salary level 2 position) for EPD Inc. The executive board of EPD voted to give all employees a cost-of-living adjustment of 2.8 percent. In addition, Taylor was awarded a merit increase of 3.5 percent. What will Taylors salary be for the coming year? Example 1

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Find the present salary from Figure 13.1 below. Example 1 Answer: Step 1

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The present salary is $40,000. Figure 13.1

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Find the cost-of-living adjustment. Salary × Cost-of-Living Adjustment Percent $40,000 × 2.8% = $1,120 Example 1 Answer: Step 2

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Find the merit increase. Salary × Merit Increase Percent $40,000 × 3.5% = $1,400 Example 1 Answer: Step 3

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Find the new salary. Present + Cost-of-Living + Merit Salary Adjustment Increase $40,000 + $1,120 + $1,400 = $42,520 Example 1 Answer: Step 4

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DMarco Mullin is a computer operator, salary level 3, for EPD Inc. He received a 2.8 percent cost-of-living adjustment and a merit increase of 4 percent. What is Mullins new salary? Example 2

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Find the present salary from Figure 13.1 below. Example 2 Answer: Step 1

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The present salary is $38,500. Figure 13.1

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Find the cost of living adjustment. Salary × Cost-of-Living Adjustment Percent $38,500 × 2.8% = $1,078 Example 2 Answer: Step 2

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Find the merit increase. Salary × Merit Increase Percent $38,500 × 4% = $1,540 Example 2 Answer: Step 3

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Find the new salary. Present + Cost-of-Living + Merit Salary Adjustment Increase $38,500 + $1,078 + $1,540 = $41,118 Example 2 Answer: Step 4

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Mark Webb earns $10.70 an hour. He receives a merit increase of 4.5 percent. What is his new hourly rate? Practice 1

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$11.18 Practice 1 Answer

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Kendra Gomez earned $48,214 last year. This year she receives a cost-of-living adjustment of 4.2 percent and a merit increase of 2.9 percent. What is her new salary? Practice 2

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$51, Practice 2 Answer

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