Employer Costs for Employee Compensation news release text

FOR RELEASE 10:00 A.M. (EDT) THURSDAY, SEPTEMBER 8, 2016                                   USDL-16-1808

Technical information:  (202) 691-6199  ncsinfo@bls.gov  www.bls.gov/ect 
Media contact:          (202) 691-5902  pressoffice@bls.gov


Employer costs for employee compensation averaged $34.05 per hour worked in June 2016, the U.S. 
Bureau of Labor Statistics reported today. Wages and salaries averaged $23.35 per hour worked and 
accounted for 68.6 percent of these costs, while benefits averaged $10.70 and accounted for the 
remaining 31.4 percent. Total employer compensation costs for private industry workers averaged 
$32.29 per hour worked in June 2016. Total employer compensation costs for state and local 
government workers averaged $45.14 per hour worked in June 2016.  

Employer Costs for Employee Compensation (ECEC), a product of the National Compensation Survey, 
measures employer costs for wages, salaries, and employee benefits for nonfarm private and state and 
local government workers. 

Retirement and savings in private industry

In June 2016, average costs in private industry for retirement and savings benefits were $1.27 per 
hour worked, or 3.9 percent of total compensation. The average cost per hour worked for defined 
benefit plans–retirement plans that specify a benefit typically based on age, years of service, and 
earnings–was 55 cents or 1.7 percent of total compensation. The average cost for defined contribution 
plans–retirement plans that specify the level of employer contributions and place those contributions 
into individual employee accounts–was 71 cents or 2.2 percent of total compensation. (See table 5.) 

Employer costs for retirement and savings plans are affected by several factors, including the percentage 
of employees that participate in the plans offered by their employer. (The National Compensation 
Survey produces comprehensive data on the percentage of workers with access to and that participate in 
retirement plans. Data for March 2016 are available at www.bls.gov/news.release/pdf/ebs2.pdf.)

Retirement and savings costs varied widely by major occupational group. Costs for management, 
professional, and related workers were $2.59 per hour worked (4.5 percent of total compensation), 
compared to $1.81 for natural resources, construction, and maintenance workers (5.3 percent) and 26 
cents for service workers (1.7 percent). (See table 5.) 

Retirement and savings costs were higher both in amount and as a proportion of total compensation for 
union workers averaging $4.34 per hour worked (9.0 percent of total compensation) as compared with 
97 cents (3.1 percent) for nonunion workers. Defined benefit plan costs were significantly higher for 
union workers at $3.12 (6.5 percent) as compared with 30 cents (1.0 percent) for nonunion workers. (See 
table 5.) 

Retirement and savings costs were higher per hour worked in goods-producing industries ($2.09 and 5.4 
percent of total compensation) than in service-providing industries ($1.10 and 3.5 percent). Retirement 
and savings costs across major industry groups ranged from $2.31 in the information industry to 24 
cents in leisure and hospitality. (See chart 1 and table 6.) 

Among Census regions, employer retirement and savings costs averaged $1.63 (4.1 percent of total 
compensation) in the Northeast, $1.11 (3.8 percent) in the South, $1.16 (3.9 percent) in the Midwest, 
and $1.33 (4.0 percent) in the West. (See table 7.)

Establishments with 1 to 99 workers averaged 78 cents (2.8 percent of total compensation), the costs for 
establishments with 100 workers or more averaged $1.86 (4.9 percent). (See chart 2 and table 8.) 

Employer retirement and savings benefit costs for full-time workers in private industry averaged $1.61 
per hour worked (4.2 percent of total compensation), significantly higher than 34 cents for part-time 
workers (2.0 percent). Retirement and savings costs for full-time workers in service occupations 
averaged 46 cents per hour worked, compared with 10 cents for part-time workers. (See table 11.) 

For information on retirement and savings provisions, see National Compensation Survey: Employee 
Benefits in the United States, March 2015, at www.bls.gov/ncs/ebs/benefits/2015/benefits.htm and 
National Compensation Survey: Health and Retirement Plan Provisions in Private Industry in the 
United States, 2015, at www.bls.gov/ncs/ebs/detailedprovisions/2015/ownership/private/ebbl0058.pdf. 

Other benefit categories in private industry

Private industry employer costs for paid leave averaged $2.22 per hour worked (6.9 percent of total 
compensation), supplemental pay averaged $1.16 (3.6 percent), insurance benefits averaged $2.58 (8.0 
percent), and legally required benefits averaged $2.54 (7.9 percent). (See table A and table 5.)

Table A.  Relative importance of employer costs for employee compensation, June 2016

Compensation                            Civilian       Private      State and local
  component                             workers(1)     industry       government
Wages and salaries                       68.6%          69.7%            63.3%
Benefits                                 31.4           30.3             36.7
   Paid leave                             6.9            6.9              7.2
   Supplemental pay                       3.1            3.6              0.9
   Insurance                              8.8            8.0             12.1
     Health benefits                      8.3            7.6             11.8
   Retirement and savings                 5.1            3.9             10.6
     Defined benefit                      3.2            1.7              9.8
     Defined contribution                 2.0            2.2              0.8
   Legally required                       7.5            7.9              5.9
   1 Includes workers in the private nonfarm economy except those in private households, and 
     workers in the public sector, except the federal government.

Employer Costs for Employee Compensation for September 2016 is scheduled to be released on 
Thursday, December 8, 2016, at 10:00 a.m. (EST).

Employer Costs for Employee Compensation data on total compensation, wages and salaries, and 
benefits in private industry are produced annually in the March reference period for 15 metropolitan 
areas. For further information about metropolitan area ECEC estimates see the September 2009 article: 
“BLS Introduces New Employer Costs for Employee Compensation Data for Private Industry Workers 
in 15 Metropolitan Areas,” at www.bls.gov/opub/mlr/cwc/bls-introduces-new-employer-costs-for-

Supplemental tables with occupational, establishment size, and bargaining status series by industry 
group are available at www.bls.gov/ncs/ect/sp/ecsuptc39.pdf and www.bls.gov/ncs/ect/sp/ecsuphst.pdf.

Relative standard errors for all cost estimates in the most recent news release and supplementary tables 
are available at www.bls.gov/ncs/ect/sp/ececrse.pdf and www.bls.gov/ncs/ect/sp/ecsuprse.pdf.  

Historical ECEC data are available in three listings, all available at www.bls.gov/ect/#tables. The 
earliest historical listing covers data for the March reference periods from 1986 to 2001. These data use 
the Standard Industrial Classification (SIC) and Census of Population occupational classification 
systems. A second listing contains data for the March, June, September, and December reference periods 
from March 2002 to December 2003. These data are also based on the SIC and Census of Population 
occupational classification systems. The most recent listing includes data from March 2004 to the 
current reference period. These are based on the North American Industry Classification System 
(NAICS) and Standard Occupational Classification (SOC) systems. 

The Consolidated Statistical Areas (CSAs) and Metropolitan Statistical Areas (MSAs) are defined by the 
Office of Management and Budget (OMB) 2003 area definitions.  For more information on the area 
definitions, visit www.census.gov/population/metro/data/pastmetro.html.

Information in this release will be made available to sensory impaired individuals upon request— 
Telephone:  (202) 691-5200; Federal Relay Service:  (800) 877-8339.

BLS news releases, including the ECEC, are available through an e-mail subscription service at: 

The PDF version of the news release

Table of Contents

Last Modified Date: September 08, 2016