Archive for Employee Benefits

Take Credit for Employee Benefits

the word benefits spelled outEmployees want to work for employers with benefits, so you try your best to provide them. The curious thing is, that while they are very important to employees and quite costly for employers, the expense of providing them are often underappreciated by staff.

One way to reinforce that it is a significant value added to an employee’s pay package is to recap your benefits and their costs at the end of the year. Once they’ve signed up, many staff members register benefits more as a payroll deduction, than as an important part of their total compensation. So it’s good to reinforce the costs involved for you, as an employer.

Consider enclosing a note with employees’ W-2s this year, detailing their benefit costs. As an alternative, make it part of your annual staff evaluation and salary negotiation process.

And don’t forget to add in all those payroll taxes you pay; in addition to health insurance, retirement plans, and other benefits, you are also contributing to Social Security & Medicare for every employee. The combination of benefits and employment taxes can add a significant percentage to your total payroll costs.


Increased 401K Contribution Limits for 2012

The IRS announced cost-of-living adjustments to annual contribution & elective deferral limits for pension plans, including 401Ks, 457bs and Defined Benefit Plans for next year. The new limits can be found on the IRS website.

This is a good time to think about how you, as a small business owner, are dealing with your retirement planning. We’re in the fourth quarter of the year, so check out your options for maximizing your contributions for this year and start planning for next year. If you don’t have a company pension plan in place, look into the benefits of putting money in an IRA or ROTH IRA for this year….you can’t go back and make it up if you let the opportunity slide for 2011.

Finding the best retirement plan for your business can be complicated, but it pays to understand the tax and savings benefits of doing so. There are a wide variety of plans available from SIMPLE 401Ks to Simplified Employee Pension Plans (SEPs) to Defined Benefit Plans to IRAs that offer a variety of flexible ways for a small business owner to sock away tax deferred savings.

After all, if you don’t take care of your retirement savings, who will?