There are different ways to compensate employees with monetary awards. The most common across the board is base pay, this is the amount of money that an employee gets for showing up each day and doing their job…but you already knew that! Variable pay can be either bonus or commission and is tied to objectives. The variable pay is not guaranteed and can often provide the employee with the incentive to over perform if structured properly. Here are some other components that are often overlooked:
- Vacation pay –In Ontario, the Employment Standards Act (ESA) stipulates that full time employees be provided with 2 weeks of paid vacation time so if your employer is providing anything over that this is above and beyond what they are required to pay and each additional week represents roughly 2% of your annual salary.
- Sick leave – The ESA provides for UNPAID sick leave, an employer is not required to pay for sick leave. Again, each week of paid sick leave is equivalent to 2% of annual salary. If your employer allows you to bank your sick days or cash them out, consider yourself extremely fortunate.
- Health and Dental Benefits – Depending on the plan, and copay arrangements, these can add anadditional $200 – 400 per month to your compensation package.
- Disability Plans – Again, depending on the plan, an employer who provides disability plans to the employees will be incurring significant costs in order to protect the employees from losing income in the event the employee is unable to work. These plans vary but can cost anywhere from $100 – 250 a month depending on the plan and the employee’s salary.
- Pension or RRSP Contribution – I have seen the full gamut of contributions from simply offering a vehicle for retirement savings and providing no contribution to 13% of annual earnings.
- Personal days off, flexible work days – It is difficult to put an amount on this but if your employer is flexible and allows the employees to take time off to deal with personal issues, this is something that should be taken into account when calculation total compensation.
- Training – Most employers offer a training budget, from $500 per year to $2,500 depending on the organization.