The aim of the modern approach to salaries and employee benefit plans is to attract, retain, recognize, and motivate the best employees. Effective salaries and benefits strategies can raise employee productivity, increase retention, and can have a positive effect on the bottom line. This article provides an overview of salaries and employee benefits in the United States.

Salaries

A salary (also called as fixed pay) is a payment provided periodically to an employee by an employer, which is usually defined in an employment contract. Salaries may be contrasted with wages, with salaries being paid without reference to specified numbers of hours worked.

Each hour is paid separately. In the view of operating a business, salary is defined as the cost of having human resources for operations – in this perspective; it is termed salary expense or personnel expense. Nowadays, the idea of salaries continues to develop as a vital component of a total rewards system offered to employees. This system includes benefits and perks and variable pay like commissions, incentive pay, and bonuses.

Salaries in the US

A Yahoo survey reveals that salary is one of the top reasons why there is low job satisfaction among American employees. In fact, about 27% of the participants believed they could have a better salary by getting a new job.

Here are the average salaries for 10 common jobs in the US: elementary teacher ($47,599), general physician ($144,435), program manager ($122,592), electrical engineer ($54,966), instrument technician ($41,765), attorney ($82,563), pharmacist ($100,015), project administrator ($48,376), programmer ($51,724), and designer ($43,452).

Employee Benefits

Employee benefits are non-wage compensations given to employees besides their salaries. The major purpose of an employee benefits program is to increase the employees’ economic security.

Fringe benefits include, but not limited to, the following: employer-paid or employer-provided housing, group insurance (life, dental, health, etc.), retirement benefits, disability income protection, daycare, sick leave, tuition reimbursement, paid and non-paid vacation, profit sharing, social security, education funding, and many other specialized benefits.

Perks are employee benefits that have a more discretionary nature: hotel stays, company cars, leisure activities while at work, free refreshments, allowances for lunch, etc.

Employee benefits in the US

Employers in the US provide employees such benefits as relocation assistance, medical and dental plans, retirement benefit plans (401(k) and 403(b)), long term and group-term life and care insurance plans, health care flexible spending accounts, adoption assistance, legal assistance plans, transportation benefits, child care benefits, and miscellaneous employee discounts – discounted shopping, wellness programs, movie and theme park tickets, hotels and resorts, etc.).

Some fringe benefits (group-term life insurance coverage up to US$50,000 and health and accident plans) are not covered by federal income tax as they are excluded from the gross income of the employee.