A Report on State Employee Benefits as a Percentage of Total Compensation
February 2009
Report Number 09-704
Overall Conclusion
The State of Texas provides a comprehensive total compensation package to employees working in state agencies. The value of the total compensation package for the average classified, regular full-time employee for fiscal year 2008 was $55,468, or $26.67 per hour, an increase of 2.5 percent from fiscal year 2007.
As part of this total compensation package, State of Texas employees receive both direct compensation, or pay, for time worked, as well as indirect compensation, which includes benefits. Quantifiable benefits included in the assessment of the compensation package are:
- Employer payroll expenses-includes Social Security and Medicare taxes, unemployment compensation, and workers' compensation.
- Time not worked-includes holidays, sick leave, and annual leave.
- Health insurance.
- Retirement contributions.
- Miscellaneous pay-includes benefit replacement pay and longevity pay.
The State's total compensation package was 67.4 percent salary and 32.6 percent benefits. This compares favorably with other state and local governments' compensation packages, which average 65.8 percent salary and 34.2 percent benefits, according to the U.S. Bureau of Labor Statistics. Total compensation is a phrase used to describe the complete rewards and recognition programs the State provides to employees in exchange for their time, talent, and efforts. The cost to provide this package represents a significant investment for the State of Texas. In fiscal year 2008, the State spent $8.5 billion on salaries, wages, and insurance benefits to state agency employees (excluding higher education institutions).
There are other benefits offered by the State that were not included in the assessment of the compensation package, such as state-paid or -sponsored professional development and training, state compensatory time, extended sick leave, military leave, parent-teacher conference leave, and volunteer firefighters and emergency medical services training leave. While the use of these benefits may vary depending upon agency and employee circumstances, they are real and valuable benefits to employees at all levels.
In addition to payroll and benefit costs, the State provides employees with other rewards that cannot be easily quantified but provide indirect, real, and valuable benefits. Examples of these rewards include flexible work schedules, employee recognition programs, challenging and rewarding work environments, and career development opportunities.
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