Understanding Employee Benefit Statements

Employers in the United States typically pay a significant portion of an employee's total compensation for benefit and tax payments. These payments made by the employer are nearly invisible to the employee. You can create a benefit statement that includes employees the funds spent on their behalf. The benefit statement can include specific information about an employee's compensation and benefits such as:

• Base salary or regular earnings.

• Specific additional earnings, such as bonuses.

• Employee and employer contributions to specific insurance benefits.

• Paid time off, such as holiday or vacation time.

• Taxes such as FICA (Federal Insurance Contributions Act), unemployment, and workers' compensation.

When you create a benefit statement, you create benefit statement headings that correspond to the categories of information that you want to display on the benefit statement. For example, you might have benefit statement headings such as medical insurance, vacation pay, taxes, and so on. For each benefit statement heading, you select the pay type, deduction, benefit, accrual (PDBA) or tax types that will provide the amount spent on each type of compensation.

After you have gathered information for the benefit statement using benefit statement headings, you can merge a benefit statement form with a list of employees who should receive a benefit statement. You use the Mail Merge feature of Microsoft Word to combine the benefit statement form and list of employees to create a customized benefit statement for each employee.

You use the Benefit Statement program (P083300) to access the steps used to create benefit statements.