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Remind employees of the full value of their compensation

December 4, 2015
Many employees focus solely on their paychecks and don’t always realize the full compensation they receive from their employers. But employees can be reminded of the total compensation package they receive, which in many cases goes well beyond a paycheck, by using a Fringe Benefit Statement.
Businesses might want to include such a statement with each employee’s W-2 Form issued in January. It is important to educate employees about just how much they are worth to the organization by pointing out the total compensation they receive as a valued member of the company.
Total compensation statements give employees information on the complete pay package awarded to them on an annual basis, including both direct and indirect compensation. 
Direct compensation can be defined as "all compensation (base salary and/or incentive pay) that is paid directly to an employee." 
Indirect compensation can be defined as "compensation that is not paid directly to an employee and is calculated in addition to base salary and incentive pay (e.g., employer-paid portions of health/dental/vision insurance, retirement benefits, educational benefits, relocation expenses, employee paid time off)." 
The more detail that an employer can provide, the more beneficial the statement. Some common items to include in a total compensation statement are: 
• Salary/hourly rate 
• Medical benefits coverage [include amount paid by employee and employer] 
• Flexible spending account information 
• Paid leave [include vacation/sick/PTO, holiday, personal, bereavement, military pay, jury duty, etc.]
• Disability insurance 
• Life insurance 
• Employee assistance program 
• Retirement benefits [include 401(k)/403(b), pension plans, etc.] 
• Educational assistance programs 
• Relocation expenses