Total rewards statement
A total rewards statement shows one employee the full value of their compensation for a period: wages plus employer-paid benefits and payroll taxes.
Total rewards statements are a communication document, not a payroll record and not a legal notice. No federal law requires one. It does not replace a pay statementPay statement (pay stub). A pay statement, also called a pay stub, is the per-payroll record showing how one payment was calculated, from gross pay to net pay.Click to open the term, a summary plan description, or any notice a plan or state requires. You produce them voluntarily to communicate compensation value. Common timing is once a year, near open enrollmentOpen enrollment. Open enrollment is the annual window when employees elect, change, or waive benefit coverage for the coming plan year.Click to open the term or after merit increasesMerit increase. A merit increase is a lasting raise to an employee’s base pay, sized by individual performance and usually set during a review cycle.Click to open the term. Pick a repeatable date so the statement stays comparable from year to year.
Where do the numbers on a total rewards statement come from?
A statement opens with base wages and any variable pay, then adds your side of the cost. That includes insurance and retirement contributions, employer payroll taxesPayroll tax. Payroll tax is the umbrella term for every tax an employer calculates, withholds, or owes because it paid wages.Click to open the term such as Social Security and Medicare, unemployment tax, and workers’ compensationWorkers’ compensation. Workers’ compensation is state-mandated insurance that pays medical expenses and partial lost wages when an employee is injured or becomes ill because of their job.Click to open the term premium. Paid leave usually appears as a value, converted from accrued or used hours at the employee’s rate. Keep the employee deduction and your contribution on separate lines. Pull your contributions from their own year-to-date balances rather than deriving them from the employee deduction. A number computed outside payroll is an estimate.
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Pull wages and employer taxes from payroll.
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Pull elections and employer contributions from benefits administration.
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Pull accrual balances and hours used from time and leave.
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Choose one period and label it plainly: a plan year mixed with a calendar year invites questions the numbers cannot answer.
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Review the figures before distribution.
General information, not legal or tax advice. Apply current federal and state rules with qualified guidance.