Hi. I need to put together a budget for a project we are bidding on. I know the target salaries for each position, but do not know what % "uplift" to add the a salaries for employer taxes and benefits. The new employees will be in CO, MA and NC. Your input on this will be greatly appreciated. Thank you in advance. Jim Cannon
What percentage "uplift" to salaries for taxes & benfits?
Answers
Jim, I've never heard the term "uplift". If you're talking about a percentage that should take into effect FUTA, SUTA, FICA, MED and possibly health care, I've used 25%.
What works better is to actually figure out the numbers - more accurate and use a standard cost for single life for employees (unless the company is paying more).
1
Thank you Wayne.
Up to 35% of salaries for taxes and benefits is common as far as I know.
2
Thank you.
Excellent suggestion. Thank you Emerson.
Depends on the "benefits". Of course the more benefits, the higher the percentage. I would ask your current payroll/benefits provider (if any). If you know a PEO rep, they can provide a very close estimate based on the benefits you plan on having.
I have used 25%-30%
I always try to figure out the percentage based on historical trends. Over several
It is a very important metric and one that all of your operating managers should know off the top of their head.
2
Agree. Thank you Lyle.
Thank you Bob. Excellent point about % varies with pay level. Most of the hires will be high price software developers (100K +/-) to attract will need a good benefit package.
As others point out, the % can vary depending on what benefits you offer. Also, for lower paid employees, a fixed cost fringe like health insurance will be a higher % of wages than for highly compensated employees. If you will be billing by the hour/day, then also factor in vacations and holidays.
While there are benchmarks, I always like to know the culture and definition of these employees. Are they going to be permanent employees who get the perks of working for the company? IF so, you should have some idea of what the benefit package is. If they are temporary employees, simply along for the project, the benefits will be much less so just talking regulatory benefits like taxes, wc, etc.
1
Once again, excellent input, thank you Elise. We plan for the hires to be employees - hopefully long term employees, so benefit package will be important to attract and keep them.
If you have a large homogenous employee base, you may get away with a standard % but as others have pointed out, benefits (especially healthcare) will comprise a much larger % for lower earners. We are a trading firm with a large disparity in compensation for our customer-facing employees compared to our back office staff. For budget purposes, we delineate fixed benefits (healthcare, LTD, etc) vs compensation-dependent variable costs (taxes, 401k match, etc).
2
Thanks Ed.
Thank you Nancy.
What think I will do at this stage is to add all the annual salaries and then add 30% to the total. It lacks precision, but give us a understand of the $ will need which is what we looking for at this point.
Thanks you to very one who responded to by question. Your advice and help is VERY much appreciated. Once again thank you.
I've always used a 24-26% range factor. It would vary based on tapering which happens throughout the year based on magnitude of pay and meeting certain
Filed Under:
Human Capital