Did you know that 59% of employees say that health and wellness benefits are a critical, defining factor that influences their retention rate with an employer?
With a stat like that, it makes you wonder why every employer doesn’t offer benefits as part of their compensation package. If you asked them, a lot of decision-makers would chalk it up to be a costly investment that they don’t think their business can handle.
Let’s get right to the meat and potatoes of raises vs. benefits…how does each stack up? For easy math, let’s say the employee is given a $2000 raise. On the employer’s side, they will need to pay out CPP, EI, WSIB and vacation pay over and above the $2000. This brings their overall expense closer to $2300 mark.
So now the employee receives their raise of $2000 (gross), but what do they have to pay? They will be faced with CPP, EI and income tax deductions (the amount varying based on their tax bracket). After all is said and done, the employee will walk away with about 50% of the cost to the employer.
Let’s look at spending the same $2000* on employee benefits in the form of health and dental coverage. Being that this type of coverage is exempt from HST (13%), the employer will only face 8% tax ($160). Which brings the overall employer expense to $2160. Now what about the employee? They receive the entire value of the $2000.
As you can see there are significant advantages both to the employee and the employer when implementing a benefits plan instead of a raise. Plus, as an employer the plan and its offerings can be customized based on the type and amount of coverage you want to extend your employees. What’s even better is that we can tailor types and amount of coverage to fit your specific budget! Now that’s smart!
*The annual premium of a benefits plan is dependent on the type of coverage you wish to offer, employee age, marital status, etc.