Total Rewards Components
| Component | Typical % of Total Compensation | Examples |
|---|---|---|
| Base salary | 60–70% | Annual salary, hourly wages |
| Variable pay | 5–15% | Bonuses, commissions, profit sharing |
| Health benefits | 10–15% | Medical, dental, vision |
| Retirement benefits | 3–8% | 401(k) match, pension |
| Other benefits | 3–7% | Life, disability, PTO, wellness |
| Perquisites | 1–3% | Company car, phone, meals |
Total Rewards Trade-Offs
Total rewards benchmarking allows employers to make informed trade-offs between compensation and benefits. An employer who is below market on salary but above market on benefits may be able to attract and retain talent by communicating the full value of their total rewards package. An employer who is above market on salary but below market on benefits may want to shift investment from salary to benefits.
Total Compensation Statements
IQ Insight
Total compensation statements that show employees the full dollar value of their compensation and benefits consistently improve benefits satisfaction and perceived value. An employee who sees that their employer is spending $25,000/year on their benefits in addition to their $60,000 salary understands that their total compensation is $85,000 — not $60,000. This framing significantly improves retention.