Definition of Benefits
What are "benefits"? What is the definition of the term "benefits"?
Benefits are "nonwage compensation" that are provided to the employees of a company. Source: BLS.gov
Benefits are grouped into five different categories:
1. Insurance (health insurance, etc)
2. Legally required benefits (workers' compensation, Social Security, etc)
3. Retirement (defined contribution plans, etc)
4. Supplementary Pay (overtime, etc)
5. Paid Leave (vacations, sick leave, etc)
Let's say that you work at a job and you receive $40,000 per year in salary, double pay for overtime and health insurance.
The $40,000 per year in salary is NOT a benefit, however the overtime pay and health insurance are benefits.
It is important to take into account the value of your benefits package when considering whether or not to accept a position.
For instance, let's say that you receive these two offers:
a) $50,000 salary, 2 weeks of vacation
b) $38,000 salary, overtime pay, 4 weeks of vacation, pension plan, health insurance
The first position pays a much higher salary, but the second position has much more in the way of benefits. You would have to try and calculate the value of the benefits package for job #2 before moving forward with a decision.
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