A Report on State Employee Benefits as a Percentage of Total Compensation
February 2012
Report Number 12-705
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 2011 was $58,808, or $28.27 per hour, an increase of less than 1.0 percent from fiscal year 2010.
The total compensation package for fiscal year 2011 comprised $39,804 (approximately 67.7 percent) in average annual salary and $19,004 (approximately 32.3 percent) in average benefits for a classified, regular full-time employee. The increase in the total compensation package resulted primarily from increased health insurance costs paid by the State.
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. (See Appendix 2 for a detailed list of the total compensation package.) Quantifiable benefits included in the calculation of the compensation package were:
- Employer payroll expenses--includes Social Security and Medicare taxes, unemployment compensation, and workers' compensation.
- Paid time of--includes holidays, sick leave, and vacation leave.
- Health insurance.
- Retirement contributions.
- Longevity pay.
As noted above, the State's total compensation package for fiscal year 2011 was approximately 67.7 percent salary and approximately 32.3 percent benefits. This compares favorably with other state and local governments' compensation packages, which average 65.2 percent salary and 34.8 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 2011, the State spent approximately $9.3 billion on salaries, wages, and insurance benefits for state agency employees (excluding higher education institutions).
There are other benefits the State offered that were not included in the calculation of the compensation package. Examples of these benefits are state-paid or state-sponsored professional development and training, state compensatory time, military leave, emergency leave, parent-teacher conference leave, volunteer firefighters and emergency medical services training leave, court-appointed special advocates volunteer leave, and extended sick leave. While the use of those benefits may vary depending upon 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 and employee recognition programs.