We can make plans for side-income and income from hobbies all day, but unless we are self-employed full time, our employer is the source of our primary income. Your employer often gives you a lot more than that. Make sure you are taking full advantage.
Outside of your paycheck, employer retirement contributions are one of the most valuable benefits of working for someone else. If your employer offers any kind of 401(k) or retirement account matching, they are giving you free money on top of your paycheck.
Most large employers offer a 100% match on 3%-6% of your annual pay when you make a 401(k) contribution. While 401(k) fees are notoriously high, the value of the match offsets that and then some. Don’t leave thousands of dollars on the table, make sure to take advantage.
I use the free site Personal Capital to help me manage my investment fees, including my 401(k).
While finding individual insurance will be much easier once state exchanges mandated by national health care reform (aka Obamacare) is fully implemented, we are still stuck with a tough situation right now.
If you are overweight or have any past health issue, insurers can reject you from individual health care plans. If you sign up through a group plan with your employer, you generally get better rates, better care, and you can’t be turned down.
My company has a great plan that covers the bulk of my month of my regular health insurance costs. When I look at what COBRA would cost, I can see the value of my company’s insurance. Your employer often pays hundreds of dollars per employee in healthcare costs.
In addition to health, dental, and vision insurance, most employers offer additional insurance options to employees. I have access to disability and life insurance through my company that is incredibly valuable if anything were to happen to me.
If you compare the cost of insurance through a group plan to individual insurance, you can again see the value you receive from your employer.
Self-employed people have to pay income taxes just like everyone else, but also have to make larger contributions to social security than people employed by someone else. If you look at your social security statement, you can see that your employer contributes quite a bit to your national retirement plan.
If you look at the line-item detail of payroll taxes, employers contribute 6.2% of your pay up to an annual maximum for social security and another 1.45% for Medicare. Employers also pay state and federal unemployment taxes on your behalf.
Some companies have free or discounted gym memberships. Some offer discounted stock purchase plans, stock options, or shares of stock to employees. There are countless combinations of additional perks and compensation you can receive from your employer. Be sure to contact your HR department and read through benefit information to ensure you are not missing out.
Your Favorite Benefits?
What are your favorite benefits from your employer? Please share in the comments.
Image by jimw / flickr
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