The best timing for employee benefit statements (total rewards, or total compensation statements) is a frequently asked question. The answer is: anytime.
But there is a caveat, so let’s dig a little deeper.
Many of our clients like to present employee benefit statements in the first quarter of each year, reflecting the past calendar year’s pay and benefits data.
For example, in March of 2022 employees would receive a total comp statement showing the pay they received and the dollar value of employee benefits they enjoyed January-December of 2021.
Alternately, if your company operates on a fiscal year, you could send statements out about 3 months after the end of the fiscal year.
This “lookback” perspective is fine, but it does lock you into getting your benefit statements out early in the calendar year before the data is old and out of date. While it might be the most common way to show benefits, it may not be the best time to provide total compensation statements to your employees.
Consider an alternative: show your employees a current annualized perspective of total compensation at any time during the year.
Take each employee’s current pay rate as of whatever date you choose, and the current monthly costs relating to their health insurance, life and disability insurance, government mandated programs, etc. Then let us calculate it out to show a full year’s worth of total rewards. Use this perspective of pay and benefits to create total compensation statements at whatever time of year is best for you! Advantages include:
- You decide the best timing for your benefit statements – just after open enrollment? before open enrollment? opposite your busiest time of year? summer, when employees are not receiving the myriad of financial statements and reports that they typically receive in January-February.
- The data is more accurate because it is current, not past data.
- It’s a realistic report – in a sense it is “real-time”!
- You capture recent increases in benefits costs, as well as any pay raises.
- We calculate the individualized costs of all the government programs for you (FICA, Federal and State Unemployment, Workers’ Comp) based on your rates and employee classifications.
- We calculate the costs and benefits of life and disability insurance based on your policies and the rates you pay.
- The data is an annualized estimate. Since it is not reflecting a calendar year, employees cannot compare with their W-2. Otherwise, you have to be certain that all the data exactly matches their W-2.
We are happy to produce your total rewards statements whether you show a lookback or a current perspective. Remember, with the current perspective you choose the time of year that’s right for you! But the best time to provide total compensation statements is NOW!
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