1. Your Hidden Paycheck An Employee Communication Presentation

2. Introduction
Most employers are diligent about providing information to employees on the company’s pay structure and how an individual employee’s pay is calculated. However, many employers fail to communicate to their employees the total value of their compensation which includes the “hidden paycheck” of all the benefits, mandatory and voluntary, to which the employer contributes and sponsors. Periodic personalized documentation to each employee on annual pay and the “hidden paycheck” results in increased awareness and appreciation for the costs of benefits, higher employee morale and retention.
This sample presentation is intended for presentation to all employees. It is designed to be presented by an individual who has knowledge of the employer’s benefit programs. This is a sample presentation that must be customized to include and match the employer’s own benefit package.

3. Agenda During this meeting, we will review:
What the term “hidden paycheck” means.
The benefits we legally provide to you.
The benefits we voluntarily provide to you.
The value of all benefits you receive as a percentage of your pay.

4. What Does the Term “Hidden Paycheck” Mean?
HR professionals often use the term “hidden paycheck” to refer to the employer’s contributions to employee benefits of which employees are generally unaware.
Statements documenting these contributions are also called “Total Compensation Statements” or “Total Rewards Statements.”
Here at [Company Name] we call these statements (fill in for your own company).
You will receive your [Statement Title] next [date]. We are having this meeting today to help you better understand the statement when you do receive it.

5. What Does the Term “Hidden Paycheck” Mean? (cont’d)
Your [Statement Title] lists your total annual pay, the amount [Company Name] spends on benefits we legally contribute to, and the amount spent on benefits provided voluntarily.
The statement also includes benchmark data on the amount employers spend on benefits as a percentage of payroll and how our company compares to the national average.

6. Legally Provided Benefits
Legally provided or mandated benefits are those required by federal and state laws. These include contributions for:
Social Security and Medicare:
These are federally mandated and administered benefits.
The cost is shared equally by the employer and employee.
The maximum wage base for the Social Security tax is set annually; if an employee earns over the amount, the excess is not taxed.
The Medicare tax does NOT have a wage base limit; all earnings are subject to this tax.

7. Legally Provided Benefits (cont’d)
Other legally provided benefits are:
Workers Compensation
This is a state-based program that provides medical treatment, wage loss reimbursement, vocational rehabilitation, and death/burial benefits to victims (or surviving dependents) for industrial accidents and occupational diseases.
In most states, the employer is the sole contributor to this program.

8. Legally Provided Benefits (cont’d)
Unemployment Insurance
This is a combined federal and state program that began during the Great Depression.
Unemployment benefits are awarded to individuals who are ready, willing, and able to work and unable to find suitable work.
The cost is shared by the employer and employee.
Some states also have disability programs which require contributions from the employer and employee.

9. Questions? Comments?

10. Benefits Provided Voluntarily
(Note to presenter: Customize for your company!)
The benefits that [Company Name] provides voluntarily and that the company and employees share in the cost are:
Health insurance
Prescription drug insurance
Dental insurance
Vision insurance
Commuter benefits (parking, van pools, mass transit tokens)
(Employee contributions for the preceding plans may be made on a pre-tax contribution resulting in lower income taxes)

11. Benefits Provided Voluntarily (cont’d)
The benefits that [Company Name] provides voluntarily and that the company pays 100% of the cost are:
Retirement/pension plan (a defined benefit plan)
Employer match to employee 401(k) contributions
Term life insurance
Accidental death and dismemberment insurance
Short-term disability insurance
Long-term disability insurance
Long-term care insurance

12. Benefits Provided Voluntarily (cont’d)
Other benefits that [Company Name] provides voluntarily and that the company pays 100% of the cost are:
Incentive bonuses
Paid time off:
Vacation leave
Sick leave
Holidays
Personal Days
Bereavement Leave
Paid weather-related emergency closing leave

13. Benefits Provided Voluntarily (cont’d)
Additional benefits that [Company Name] provides voluntarily and that the company pays 100% of the cost are:
Tuition assistance (up to $5,250 tax-free per year)
Employee assistance program (EAP)
On-site fitness center
On-site child care
Computer purchase assistance
Scholarships for children of employees
Paid sabbaticals
Direct deposit of pay
Social gatherings (holiday party, summer picnic)

14. Benefits Provided Voluntarily (cont’d)
In addition [Company Name] sponsors and pays the administration fees for the following benefit plans which employees may participate in by making contributions:
401(k) savings and retirement plan
Health savings account
Health flexible spending account
Dependent care flexible spending account

15. Value of Benefits as a Percentage of Pay
According to the 2008 SHRM Employee Benefits Report, employers spent an average of 39% of an employee’s annual pay on mandatory and voluntary benefits. Of the 39%, 21% was spent on mandatory benefits and 18% on voluntary benefits.
[Company Name] spends an average of [use your calculation] of an employee’s annual pay on mandatory and voluntary benefits. Of the (_ %), (_%) is spent on mandatory benefits and (_%) on voluntary benefits.

16. Questions? Comments?

17. Summary
The term “hidden paycheck” refers to the employer’s contributions to employee benefits of which employees are generally unaware. Statements documenting these contributions are also called “Total Compensation Statements” or “Total Rewards Statements.” These statements list annual pay, the amount the company spends on mandatory benefits, and the amount spend on benefits provided voluntarily.
Mandated benefit programs are Social Security, Medicare, Workers Compensation and Unemployment Insurance

18. Summary (cont’d)
Benefit programs offered voluntarily include various types of insurance such as medical, dental, disability and life. Others are bonuses, paid time off, tuition assistance, retirement and flexible spending accounts.
According to the 2008 SHRM Employee Benefits Report, employers spent an average of 39% of an employee’s annual pay on mandatory and voluntary benefits.

19. Course Evaluation
Please be sure to complete and leave the evaluation sheet you received with your handouts
Thank you for your attention and interest !