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What Benefits Could be in a Compensation Package?

Many employers offer some form of healthcare coverage in a compensation package.
Sick pay is usually included in an employer's compensation package.
Vacation pay is often a perk included in a compensation package.
Many companies offer bereavement leave to employees who have experienced the death of a loved one.
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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 15 December 2014
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Along with salary and wages, many employers offer added incentives in what is known as a compensation package. This package is simply the additional perks and benefits that are extended to the employee as part of his or her compensation for performing job related tasks efficiently and correctly. There are a number of different benefits that can be included in a package of this type, even when the employer is a small business.

One of the most basic elements in any compensation package is health insurance. Even when the employer offers nothing more than salary or wages, there is a good chance that health coverage will be offered in some form. Many employers pay the entire premium, while others share the cost with the employee through a payroll deduction each pay period. In most cases, the coverage provided by the group insurance plan carries lower deductibles and a wider scope of coverage than the employee could obtain individually for the same premium.

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Sick, bereavement, and vacation pay are also normally included in a compensation package. It is not unusual for employers to extend several days of time off with pay to employees who have recently lost a close loved one to death. Many companies limit this to familial relationships such as a parent, child, and spouse. In some cases, grandparents, aunts and uncles, and sometimes cousins are also considered close family members for the purposes of granting bereavement pay. In general, this benefit is limited to a certain number of days each calendar year.

With vacation and sick pay, many companies allow employees to accumulate time off for each of these functions over the course of the year. For example, an employee may earn one vacation day for each sixty days of continuous employment. For employees who have been with the company for several years, they may accrue sick and vacation days more quickly. However, many companies are choosing to simplify this process by granting employees a bank of sick and vacation days on the first work day of the year, with the provision that the days must be used at some point during the current year or be lost.

Along with health coverage, many employers also offer their employees disability insurance coverage along with some type of basic life insurance policy. The employer may cover all the costs associated with each of these types of insurance or allow the employee to pay for them via payroll deduction each pay period. As with any type of coverage, there are usually some exceptions and limitations that apply.

Retirement plans are another integral part of the compensation package offered by many employers. At times, this is a simple pension plan. However, a retirement package may also be based on the issuance of stock options via a money market, or the accumulation of shares of company stock over the years. When stock options are involved, the employer often bases the number of shares issued annually on several factors, including the salary classification of the employee. The employee may also participate in a plan that involves company ownership, such as an ESOP or Employee Stock Ownership Plan.

The exact compensation offered will vary from one employer to another. Factors such as the size and profitability of the business will often influence the type of package that is offered. In addition, employees normally must be classified as full time in order to receive a package, and may be limited on the type of benefits included based on whether the employee is considered salaried or hourly. The best way to determine what type of compensation package is offered along with the offer of employment is to meet with a member of the Human Resources team and go over each benefit.

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cloudel
Post 5

@kylee07drg – That sounds like a pretty sweet package! Did your friend have to work several years to get that much time off, or do all the employees get that much?

My dad had to work decades before he got four weeks off with pay a year. He really earned his time off.

He also had to be on call once a month, so they put him through a lot. He deserved time off to rest, and the company knew it. They didn't want him to get too frustrated with them and quit.

kylee07drg
Post 4

My friend has an awesome employee compensation package. She automatically gets all her vacation and sick days at the beginning of each year, so she can take them at any time.

She gets four weeks worth of vacation days and two weeks of sick days! That's more than most people I know. She also gets a lot of holidays off that most people don't get.

healthy4life
Post 3

@feasting – My company made us work for a year before getting vacation days, too. However, the sick days start accruing after a month and a half of work.

We would get one full day for every month and a half we worked. We also had the option of taking half days if necessary if we had not yet accrued an entire day of sick time.

This was great for days when I started feeling sick at work. I could usually make it through til noon and then take my four hours of time off.

feasting
Post 2

I remember being amazed at my employee compensation and benefits package when I got my first job. I had never had so much offered to me before just for working somewhere, because I had only ever held part-time jobs that paid minimum wage.

I got health insurance, dental and vision insurance, a 401(k) with company match up to 15%, sick days, and vacation days. This just blew my mind at the time.

There were certain conditions, though. I had to work for three months before I would be eligible for health insurance, and I had to work a year before I got any vacation days or the opportunity to contribute to the 401(k).

anon172673
Post 1

I agree, benefits aside from money are great incentives for employees to work hard for the company and produce results. --Annette C.

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