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February 27, 2004
The Costs of Employee Compensation in December

Employer costs for employee compensation for civilian workers averaged $24.59 per hour worked in December 2003, the Bureau of Labor Statistics of the U.S. Department of Labor reported. Wages and salaries, which averaged $17.56, accounted for 71.4 percent of these costs, while benefits, which averaged $7.03, accounted for the remaining 28.6 percent.

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Costs for legally required benefits, including Social Security, Medicare, unemployment insurance, and workers' compensation, averaged $1.96 per hour (8.0 percent of total compensation), representing the largest non- wage employer cost. Employer costs for paid leave benefits (vacations, holidays, sick leave, and other leave) averaged $1.65 (6.7 percent); life, health, and disability insurance benefits averaged $1.88 (7.6 percent); and retirement and savings benefits averaged 90 cents (3.7 percent) per hour worked.

In December 2003, private industry employer compensation costs averaged $22.92 per hour worked. Wages and salaries averaged $16.49 per hour (71.9 percent), while benefits averaged $6.43 (28.1 percent.)

Employer costs for insurance benefits averaged $1.62 per hour worked (7.1 percent), paid leave averaged $1.48 per hour worked (6.5 percent), retirement and savings averaged 70 cents (3.1 percent), supplemental pay averaged 64 cents (2.8 percent), and legally required benefits averaged $1.96 (8.6 percent) per hour worked.

The average cost for legally required benefits was $1.96 per hour worked in private industry (8.6 percent of total compensation) in December 2003. Included in this amount were employer costs for Social Security, Federal and State unemployment insurance, and workers' compensation.

Paid leave costs in goods-producing industries were $1.74 per hour (6.5 percent of total compensation), compared with $1.41 (6.5 percent of total compensation) for service-producing industries in December 2003. Included in this amount were employer costs for vacations, holidays, sick leave, and other leave, such as personal leave, jury duty leave, military leave, and funeral leave.

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