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401(k) contribution: 6 percent of annual salary. The company match is 75 percent of employee contribution up to 4 percent.



Medical insurance deduction: \$230 per month

Dental insurance: \$15 per month



Required:

Complete the following Benefits Analysis Report for Avery for the year. Do not include the FUTA and SUTA taxes.

Note: Round your answers to 2 decimal places. Enter all amounts as positive values.



Yearly Benefit Costs		Company CostAvery's Cost

Medical insurance		\$ 21,600.00\$ 2,760.00

Dental insurance		\$ 1,300.00\$ 180.00

Life insurance		\$ 440.00\$ 0.00

AD\		D\$ 106.00\$ 0.00

Short-term disability		\$ 1,060.00\$ 0.00

Long-term disability		\$ 530.00\$ 0.00

401(k)		\$ 1,520.00\$ 2,280.00

Social Security

Medicare

Tuition reimbursement		\$ 1,520.00\$ 0.00

Total yearly benefit costs

Avery's annual salary		\$ 38,000.00

Total value of Avery's compensation

Verified Answer :

  • Calculate mandatory FICA taxes: Social Security is \(\$2,356.00\) and Medicare is \(\$551.00\) for both parties.
  • Sum all company costs: \(\$21,600 + \$1,300 + \$440 + \$106 + \$1,060 + \$530 + \$1,520 + \$2,356 + \$551 + \$1,520 = \$30,983.00\).
  • Calculate Avery's total contribution: \(\$2,760 + \$180 + \$2,280 + \$2,356 + \$551 = \$8,127.00\).
  • Determine total compensation: \(\$38,000 + \$30,983 = \boxed{\$68,983.00}\).

Explanation

  1. Calculating Tax Components and Benefit Totals

To create a comprehensive Benefits Analysis Report for Avery, we first identify the known costs and then calculate the missing tax components based on the annual salary of \(\$38,000.00\).

First, we determine the mandatory FICA taxes, which apply to both the company and the employee:

  • Social Security tax is calculated as \(6.2\%\) of the annual salary: \(0.062 \times \$38,000.00 = \$2,356.00\).
  • Medicare tax is calculated as \(1.45\%\) of the annual salary: \(0.0145 \times \$38,000.00 = \$551.00\).

These amounts are added to both the Company Cost and Avery's Cost columns in the benefits report.""",number:1,title:

  1. Determining Total Costs and Compensation

Next, we calculate the total yearly benefit costs and the total compensation.

For the Company:
The sum of all company-paid benefits is:
\(\$21,600.00 + \$1,300.00 + \$440.00 + \$106.00 + \$1,060.00 + \$530.00 + \$1,520.00 + \$2,356.00 + \$551.00 + \$1,520.00 = \$30,983.00\).
The total compensation is the sum of the annual salary and the total company benefits:
\(\$38,000.00 + \$30,983.00 = \$68,983.00\).

For Avery:
The sum of all employee-paid benefits is:
\(\$2,760.00 + \$180.00 + \$0.00 + \$0.00 + \$0.00 + \$0.00 + \$2,280.00 + \$2,356.00 + \$551.00 + \$0.00 = \$8,127.00\).""",number:2,title:

  1. Finalizing the Benefits Analysis Report

Finally, we complete the Benefits Analysis Report with the calculated values:

Yearly Benefit CostsCompany CostAvery's Cost \) Medical insurance\$ 21,600.00\$ 2,760.00 \) Dental insurance\$ 1,300.00\$ 180.00 \) Life insurance\$ 440.00\$ 0.00 \) AD\D\$ 106.00\$ 0.00 \) Short-term disability\$ 1,060.00\$ 0.00 \) Long-term disability\$ 530.00\$ 0.00 \) 401(k)\$ 1,520.00\$ 2,280.00 \) Social Security\$ 2,356.00\$ 2,356.00 \) Medicare\$ 551.00\$ 551.00 \) Tuition reimbursement\$ 1,520.00\$ 0.00 \) Total yearly benefit costs\$ 30,983.00\$ 8,127.00 \) Avery's annual salary\$ 38,000.00- \) Total value of Avery's compensation\(\boxed{\$68,983.00}\)- \)
""",number:3,title:

Examples

Understanding total compensation is vital for employees and employers alike when evaluating a job offer. A competitive salary is often just one part of the package; benefits such as health insurance, retirement contributions (like a 401(k)), and tuition reimbursement significantly impact an employee's financial well-being. By calculating these non-salary benefits, an individual can better compare job opportunities and assess the true "take-home" value of their employment agreement beyond just their base pay.

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